FPCCI acting president Suleman Chawla said the unprecedented volatility in rupee-dollar parity is playing havoc with the economy; and, now imports of essential commodities and industrial raw materials are also under threat if the current bout of downward spiral continues. He explained that the situation is so mismanaged and grave that many factories are at the risk of closure or will have to face financial penalties for not being able to keep up with their production schedules and export deadlines.
Acting FPCCI chief noted with profound concerns that the rupee has crossed Rs224 per dollar in the intra-day intra-bank market on Tuesday, till the issuance of this press release; which shows a depreciation of another Rs8.8 against USD. He added that this should be treated as an economic emergency by all stakeholders and reiterated FPCCI’s stance that all parties should agree on the lowest common denominator, i.e., charter of the economy. He said that FPCCI is ever-ready to play its due role in making all stakeholders sit together in the broader national interest. Suleman Chawla maintained that the business, industry, and trade community had not yet recovered from Monday’s depreciation; which was Rs4.25 or 1.97pc; and, today intra-day trading shows another depreciation of 4pc. No country or economy can bear the brunt of exchange rate depreciation of 6 – 7pc in a period of two days.
Acting FPCCI President has proposed that the government should announce the expected inflows of the dollar through all sources to put a halt to the uncertainty, chaos, and rumour-mongering in the market, i.e. IMF, World Bank, ADB, IDB; and, other multilateral & bilateral grants, loans and financing facilities. Suleman Chawla emphasized that perception is mightier than reality in the markets; and, the government needs to communicate and reach out to the markets to instil confidence and credence with regard to their financial management of the national accounts.
Suleman Chawla also expressed his trepidations pertaining to various restrictive measures being applied by SBP to control the outflow of dollars. He agreed that FER needs to be protected; but, not at the cost of export-oriented industries, disrupting industrial production, and discouraging LCs & cash against the document import scheme.
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