ISLAMABAD: The Islamabad Chamber of Commerce and Industry (ICCI)) has shown great concerns over the falling forex reserves of the State Bank of Pakistan, which have tumbled down to a new low level of around $3.7 billion and sharp erosion in the value of rupee, which has fallen to over Rs265 against a dollar in the open market on Friday.
These indicators show that if immediate corrective measures are not taken, the economy of Pakistan would be heading towards a collapse.
Ahsan Zafar Bakhtawari, President, Islamabad Chamber of Commerce and Industry said that strong foreign exchange reserves of a country give confidence to the local and foreign investors, but the continuous fall in the forex reserves of Pakistan are shaking the confidence of the business community and the potential investors.
He said that the government in consultation with the private sector should take war footing measures to boost exports and divert remittances through banking channels to improve the foreign reserves of the country. He said that over 9000 containers carrying essential commodities including petroleum products, LNG and soyabean are stuck up at ports due to shortage of dollars.
He stressed that the government should explore out of the box solutions to improve the foreign exchange reserves to ensure that all essential imported consignments are cleared on time to save the business community from further losses.
ICCI President said that the unprecedented fall in the value of rupee in just two days would not only trigger a new wave of inflation, the expensive loans after the interest rate hike would hit the industrial activities.
He said that the weak rupee would also increase the landed cost of imported goods and industrial raw materials besides making the life of common man more miserable.
He said that SBP had increased the interest rate to tame the inflation, but the latest currency devaluation would negate the SBP’s efforts to check food prices.
He stressed that the government should take solid measures to bring stability in the local currency to save the businesses and the people from its harmful consequences.
Faad Waheed, Senior Vice President ICCI said that the costly borrowings after the hike in interest rate and falling value of rupee would make it more difficult to run the industries and this situation would lead to closure of more industries causing further unemployment.
Engr Azhar ul Islam Zafar, Vice President ICCI said that the declining value of rupee would increase the prices of all imported food items besides hiking the prices of locally made items. This situation would make it very difficult for low-income people to manage food expenditures and the country can experience social unrest.
Copyright Business Recorder, 2023
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