Impact of readjusted exchange rate devastating for economy

F.P. Report

ISLAMABAD: President Pakistan Businessmen and Intellectuals Forum (PBIF), President AKIA, Senior Vice Chairman of the Businessmen Panel of FPCCI and former provincial minister Mian Zahid Hussain on Monday said impact of the readjusted exchange rate can be devastating for the economy and the common man.

Despite the devaluation of the rupee, the soaring trade and current-account deficits will keep our currency under pressure with or without intervention of the central bank, the former minister said in a statement issued here.

He said exports stood at nine billion dollars while imports were recorded at twenty four billion dollar in the first five months of this fiscal year pushing trade deficit to fifteen billion dollars.

On the other hand, he said, the fiscal deficit for the first four months was recorded at five billion dollars which was 2.26 billion dollars a year ago during the same period, he added. He said the adjusted exchange rate will provide some support to the falling exports but steps should also be taken to slowdown the imports otherwise the effort will remain counterproductive as imposition of regulatory duties has not produced the desired results.

Exporters should not depend on the government but also try to improve their manufacturing, quality, branding and marketing abilities to become more competitive in the global market, he observed.

While IMF and some circles are demanding more depreciation, the decline of local currency will increase inflation, cost of raw material and compel the government to increase price of fuel and electricity to avoid the fiscal impact, he added.