The fourth round of devaluation to result in a fresh wave of inflation
Karachi, July 17, 2018 (PPI-OT): The Federation of Pakistan Chambers of Commerce and Industry (FPCCI) on Tuesday said continued erosion in the exchange rate proves that the measures adopted to reduce demand of the American currency have not worked as expected due to uncertainty. The country saw the fourth round of devaluation as the rupee crashed to Rs129.4 to the greenback due to the gap in the demand and supply which is very unfortunate, it said.
Adjustment in the exchange rate, increased policy rate and other measures have not helped contain the nervousness that has resulted in high domestic demand of the dollar, said President FPCCI Ghazanfar Bilour. Increased exports and improved remittances have not helped to stabilise the forex reserves as expenditures remain much higher than the income, he added.
Ghazanfar Bilour said that the rupee has lost over 21 percent against the greenback as economic managers are becoming desperate to curtail a widening current account deficit and stop the slide of depleting foreign exchange reserves. The erosion in the exchange rate will result in a fresh wave of inflation which will hurt the masses and the business community, he noted.
The FPCCI President said that the policy of this high growth which was accompanied with a notable deterioration in the country’s balance of payments was flawed at best. The costly oil, other imports and weak rupee will hit the profit of the business community which will result in unemployment and low revenues.
He lauded the caretaker government which has started preparations so that the elected government can approach IMF for another bailout package but said that masses should be taken into confidence about repeated devaluations. The former government should have reached to the IMF for a loan to save the economy but it was avoided for political reasons which resulted in the economic turmoil, he observed.
Federation of Pakistan Chambers of Commerce and Industry (FPCCI)
B-1, Federation House, Main Clifton Road,
Shahra-e-Firdousi, Karachi-75600, Pakistan
Tel: +92-21-35873691, 93-94