Karachi Chamber of Commerce and Industry President Muhammad Haroon Agar on Friday expressed his deepest concerns over the recurring devaluation of the Rupee against the Dollar, terming it detrimental for the economy.
Agar said that this recurring devaluation was due to the inefficiency of policy makers. The Rupee had plunged to an all-time low and would not attract the investors, he added. Due to the huge difference in the interbank exchange rates, the expatriate Pakistanis would opt for other channels to send their remittances to Pakistan, he added.
Agar also said that Pakistan could not afford to have one of the worst-performing currencies in Asia, which was a result of deficits, lack of capital inflows, depletion of reserves, flight of capital and failure to push through economic reforms. It appeared that policymakers lacked a consistent plan to stabilize the currency which would compel the business community to start looking at opportunities in other countries, he added.
Furthermore, he said this depreciation had nearly halted economic growth in the country as it had hit all the important areas of economy from agriculture to industry. Agar recommended the government to take immediate measures to curtail further devaluation which would cause additionally adverse consequences for the economy.
He said that although the weaker rupee may benefit exporters by giving them more rupees per dollar, this benefit was neutralised by the additional cost of imported inputs in the manufacturing sector including textiles.
He said that in the current scenario, the depreciation would not push up exports and would rather inflate the import bill and inflation, adding that the latter had became closely linked to the exchange rate because of Pakistan’s ever growing reliance on imports, particularly in the energy sector.
