Daily Times

The Islamabad Chamber of Commerce and Industry (ICCI) has expressed great concerns over continuing depreciation of Pakistani rupee against the US dollar and called upon the government to take urgent steps to stabilise exchange rate.

ICCI President Sardar Yasir Ilyas Khan said that the value of Pakistani rupee has now tumbled to over Rs168 against one dollar, which shows that rupee is losing its value at an alarming rate, said a statement issued on Saturday.

He said the situation reflects a deteriorating market perception about the country’s capacity to finance its foreign debt obligations going forward. He said that the constant erosion in the value of rupee is severely disturbing all future plans of the business community as it needed a stable exchange rate for long-term business and investment planning.

He said that people are already facing great problems due to high inflation, adding the falling value of rupee would bring a new wave of inflation in the country, making the life of a common man more miserable. He said that Pakistan’s trade deficit has risen sharply in August driven by surging imports compared to exports as merchandise trade deficit reached $4.05 billion in August against $1.740 billion over the corresponding month of last year showing an increase of 133 percent.

He stressed that the government should incentivise imports substitution to reduce dependence on imports that would arrest further devaluation of rupee and prevent the build-up of imported high inflation. He said that the traders are also reportedly booking dollars for future import payments at a higher premium or spread, which predicts further rupee depreciation.

He said that in this scenario, the growth of the economy would remain uncertain amid fears of further deterioration in the fiscal and current account imbalances and it is high time that the government should take urgent remedial measures to curb the situation from getting worse.

ICCI Senior Vice President Fatma Azim and Vice President Abdul Rehman Khan said that some industries are importing around 70 percent of their raw material for manufacturing activities and decreasing value of rupee would further push up production cost making Pakistani exports more uncompetitive in the international market.

They said that the government is charging high taxes on POL products and emphasised that it should make significant cuts in such taxes in these tough times to provide some relief to the inflation-hit people.

It is pertinent to mention that $1 is trading at Rs168.02 in the interbank. This is the lowest level of the local currency against the greenback since August 26, 2020. Within the open market, the rupee was traded at Rs168.20/169 per dollar.

Overall, Pakistani rupee shed Rs1.11 against the US dollar during this week, while depreciation during the fiscal year 2021-22 has been Rs10.66. The local unit has shed Rs7.83 against the US dollar in the current year 2021.