LAHORE: President of the Lahore Chamber of Commerce & Industry Mian Nauman Kabir has feared that speedy dollar flight and demurrage, detention charges on the importers will hit the business plans badly.
While talking to a group of businessmen, Mian Nauman Kabir said that the government the State Bank of Pakistan should arrest the dollar flight through short-term and long-term measures otherwise it will reignite high inflation and halt growth by hitting all the important sectors of economy. He said that the government should not only arrest the dollar flight but should also urged the shipping companies to wave-off the detention charges of the containers that were stuck on the ports because of ban on the luxury goods.
Mian Nauman Kabir said that it was very encouraging that the government accepted the LCCI demand and released the consignments stuck at ports and airports and granted one-time special permission to release the consignments to salvage the importers whose consignments of luxury goods which were landed on or before June 30, 2022. He said that the day-by-day jumps in dollar value against Pak-rupee will jack-up the cost of doing business.
He said that the State Bank of Pakistan needs to ascertain the factors that are weakening the value of rupee and check the possibilities of undue speculations and malpractices in the operation of foreign exchange markets in Pakistan. This will help stabilize rupee and restore the confidence of the business community.
Mian Nauman Kabir said that the main cause of the devaluation in recent times has been the political uncertainty. He said that since our Industry heavily relies on imports of raw materials, components and machinery, this devaluation has resulted in an increase in the cost of production. The Government should take all possible measures to strengthen the local currency. He said that there is a dire need to be a renewed focus on import substitution and enhancing exports besides creating an environment of political stability.
The LCCI President said that an unchecked increase in the dollar rates is multiplying the cost of doing business and badly affecting the industrial, manufacturing and agriculture sectors as Pakistan has to import oil, fertilizers, food items, machinery and industrial raw material. He said that the government should take immediate measures to revert the trend of devaluation of rupee to avoid more damaging consequences for the economy.
Mian Nauman Kabir said that though the weaker rupee benefits the exporters by giving them more rupees per dollar, but this benefit is neutralized by the costly imported inputs of manufacturing sector including thus eroding the financial advantage of a weaker rupee. He said that the economy is already under tremendous pressure owing to multiple internal and external challenges it has been facing for the last many years.
The LCCI President added that a further fall in value of rupee will cause more contraction in economic activities leading to a drastic cut in the tax revenue for the government. He said that if the greenback continues its upward trend, it will certainly inflate import bill besides lowering the competitiveness of Pakistan’s business and industry. Therefore, the government should get quickly into action to arrest this dangerous trend.