Weak rupee to hit every person in the country

F.P. Report

KARACHI: Islamabad Chamber of Small Traders on Sunday said planned erosion in the exchange rate is to hit every person in the Pakistan.

“The currency has been left on the mercy of IMF, exporters and currency dealers which amounts to playing havoc with the country. A few months back the government decided to not let the market forces play with the local currency but now it has allowed it which is amazing,” said Patron Islamabad Chamber of Small Traders Shahid Rasheed Butt in a statement issued from Islamabad.

He said that the demand of the exporters to devalue the currency to boost exports is based on unfounded assumptions at it gives a temporary relief but it inflicts heavy losses to the economy which is already fragile.

Butt said that there should be a limit to the devaluation as it increases the cost of imports which are more than double of the exports, it increases the price of imported raw material, slows growth rate and makes exports expensive. Devaluation also adds to the cost of debt servicing which is a major concern for the policymakers as it continues to grow to unsustainable limits, he added.

The business leader said that country continued to devalue the currency to spur exports since the last forty years. Devaluation has created a perpetual problem of trade and current account deficit which is being tackled through remittances and loans. He said that government should not have accepted the demand of IMF and exporters for further devalue rupee.

The government had reacted sharply when SBP devalued the currency on July five that caused uncertainty in the market and worried business community. An inquiry was launched and a new governor of the central bank was appointed but now it has changed its policy which will start hurting masses within days, he warned.