ICCI concerned over sharp devaluation of rupee against dollar

Islamabad: The Islamabad Chamber of Commerce & Industry (ICCI) has shown great concerns over the sharp devaluation of rupee against dollar as it would cause manifold increase in foreign debt, enhance cost of production and unleash a new wave of inflation for the common man making his life more miserable. It called upon the SBP and the caretaker government to take urgent remedial measures to end volatility and bring stability into the value of rupee.

ICCI President Sheikh Amir Waheed said that Pakistan was already overburdened with foreign debt while falling value of rupee would make manifold increase in foreign debt as devaluation of Rs.1 caused almost Rs60 billion increase in public debt.

He said the falling value of rupee against dollar was indicative of a weak economy and added that any further devaluation of rupee would create additional challenges for our fragile economy. He said the rise in inflation due to devaluation of rupee would curtail the purchasing power of people leading to further slump in the business activities as growth of trade and industry depended on the purchasing power of the general public.

Sheikh Amir Waheed said that the local industry was importing lot of raw material for manufacturing of various products and the devaluation of rupee would enhance cost of production that would affect exports as our exportable products would become more uncompetitive in the international market.

He said that Pakistan’s trade deficit during the first 11 months (July 17 to May 18) have swelled to around US$34 billion and the devaluation of rupee would further increase trade deficit that would put more pressure on the forex reserves of the country. Therefore, he called upon the SBP and government to take urgent measures to stabilize the domestic currency.

Muhammad Naveed Malik, Senior President, Islamabad Chamber of Commerce & Industry said that the value of one dollar against rupee was Rs97-98 in June 2013 which has now fell to Rs122-123 against one dollar in recent days. It showed that our currency has devalued by over 24 per cent during the last five years.

He was afraid that if this trend continued, our future generations would be badly trapped in debt and economy would get further weakened. He urged upon the SBP and the government to take strong steps to bring stability in the value of currency to save the general public and the economy from further troubles.