ICCI shows concerns over record devaluation of rupee and hike in policy rate

  • December 01, 2018
The Islamabad Chamber of Commerce & Industry has shown great concerns over the record fall in the value of rupee against dollar in one day which plunged to Rs.144 against a dollar and settled at around Rs.138-139. It would cause manifold increase in the cost of doing business and bring a new wave if inflation for the common man. The Chamber also expressed unhappiness over the 1.5 percent hike in key policy rate by the SBP as it would further enhance the credit cost for the private sector and slow down economic growth of the country.
Ahmed Hassan Moughal, President, Islamabad Chamber of Commerce & Industry said that during the last 12 months, rupee has witnessed about 26 percent devaluation against dollar as in January 2018 the value of our currency was around Rs.110 against a dollar which has now tumbled to around Rs.139 against a dollar. He said that the sudden fall in the value of rupee against dollar badly disturbed all plans of the business community as they needed a stable exchange rate for long-term business planning. 
ICCI President said that record devaluation of rupee against dollar would have a negative impact on all sectors of the economy. He said the manufacturing sector was importing 60 percent raw material while Pakistan was also importing fertilizer, food items, oil, machinery and many other items. He said the abrupt devaluation of rupee would further enhance the cost of doing business, increase inflation and further slowdown economic activities. He urged that the government should immediately take remedial measures to bring stability in the local currency in order to save the economy from further troubles.
Rafat Farid Senior Vice President and Iftikhar Anwar Setthi Vice President, Islamabad Chamber of Commerce & Industry said that SBP has made 1.5 percent hike in the policy interest rate increasing it to 10 percent that would further enhance the credit cost for the private sector. They said that Pakistan was facing huge trade, current account and fiscal deficits. They said that the best option for the government to cope with these challenges was to provide easy credit facility to private sector for expansion of businesses in order to promote trade and exports. However, they said that the measures of the current government like currency devaluation, hike in policy interest rate and significant cut in PSDP would badly affect the business activities and slowdown GDP growth of the country. They emphasized that instead of taking anti-business measures, government should create conducive environment for private sector so that the business community could be able to promote business activities and steer the country out of troubled waters.