Traders, industrialists demand SBP governor appointment, regulatory measures against commercial banks

KARACHI: Industry and trade leaders have demanded the government to immediately appoint a central bank governor, pen a charter of economy with the opposition, and carry out forensic audit of commercial banks to arrest rupee fall.

They alleged that while the rate of dollar was Rs227, commercial banks were clearing documents at the rate of Rs242, which should be regulated by the central bank. The SBP should intervene to check the fall of the currency, as with the falling rupee, the government’s debt burden had increased by Rs9,700 billion.

Otherwise, they warned that the worsening economy would lead to a national security crisis in the next 15 days.

Federation of Pakistan Chambers of Commerce and Industry (FPCCI) and Karachi Chamber of Commerce and Industry leadership held two separate press conferences on Thursday that were joined by associations and industrialists from other cities as well.

FPCCI President Irfan Iqbal Sheikh, along with other office bearers addressing an emergent press conference at the Federation House demanded a forensic audit of commercial banks that were allegedly involved in currency speculation. This was what led to the unrealistic depreciation of the rupee against dollar, they claimed.

Federation leaders from Islamabad, Lahore, Peshawar and other offices joined the press conference through a video link. They also held a meeting after the press conference.

Sheikh said importers were not getting dollars and their letters of credit were not opening. This would lead to an unwanted situation in the country, and the next 15 days were crucial for the national economy and security.

He said that economic and inflation concerns had become a national security issue and if rupee depreciation was not stopped and handled on an emergency basis, a Sri Lanka-like situation might develop in the country. “Due to uncertainty and inflation, petrol would not be available which would lead to public chaos.”

A 1,000 containers were stuck at the port that should be immediately allowed to go to the destination, as $120/day charges were being paid, Sheikh added.

FPCCI office bearers recommended the government to float an amnesty scheme on foreign currency that could bring around $8 billion in circulation, as Pakistani people were holding a large volume of the foreign currency with them.

They said rupee depreciation was also a result of a lack of regulation by the State Bank of Pakistan, which was run by an acting governor.

They demanded the government to take the federation and chambers on board when forming economic policies and committees.

FPCCI president urged to appoint SBP governor in 48 hours, so the regulator takes care of currency speculation by commercial banks and fixes a dollar rate for a minimum 15-30 days.

He also suggested forming an economic disaster management committee on the same lines as the NCO that handled the Covid-19 pandemic. “All the political parties should sit on a charter of the economy within the next 72 hours,” he further asked.

Political stability was of utmost importance to achieve economic stability.

In a separate press conference, Businessmen Group (BMG) Chairman Zubair Motiwala and and KCCI President Muhammad Idrees also discussed g the current political and economic scenario of the country.

They too expressed deep concerns about the government’s non-serious attitude in dealing with the rupee crisis, economic challenges, political uncertainty, and unregulated profiteering by banks.

Motiwala said industrialists were unclear about whether they shut down the industries or carry on operations, while traders were not clear whether to keep the goods or sell in the market. “Industries will not be able to operate with such high and fluctuating cost of doing business as they are unable to ascertain the selling price and manufacturing cost of their products amid such an intense level of uncertainty,” he added.

Motiwala said that to reduce the import bill, raw material import was being stopped and they were afraid about how the industry would work in the coming days.

He conceded that though the current political instability in the country had also weakened the currency, economic indicators were not that poor.

He said that they were also ready to mediate a dialogue on the economy between the government and the opposition.

He warned if the industry's demands were not listened to, industries would shut down which would lead to the loss of jobs; and that “would be dangerous”.