LAHORE: Pakistan should devalue its currency or withdraw a slew of taxes and surcharges to help industries grow.
Pak-China Joint Chamber of Commerce and Industry President Shah Faisal Afridi said this while commenting on the current yuan devaluation policy of China.
Pakistan has to devalue its currency emulating Chinese strategy to curtail diminishing exports” it was stated by He said that other strategies such as policy rate cuts and interest rate relaxations in Pakistan have not helped exporters because government borrowings and reliance on banks have always dominated the lending scene.
He regarded currency devaluation indicated by China as valiant step in its move to a more market-determined exchange rate. “The relationship between the real exchange and the level of output is an essential and hot issue for economic growth” said Afridi. For the improvement of international trade devaluation of currency is considered a key tool for the development of economy, he added.
He mentioned that the decision of the People’s Bank of China (PBOC) to devalue the yuan will have global ramifications, in the short, medium and long term. Immediately it will increase the competitiveness of China’s exports at a time when the country’s economy is growing at its slowest rate for six years, said Afridi.
Faisal Afridi suggested that Pakistan should also devalue its currency or withdraw a slew of taxes and surcharges to help industries grow. He said that devaluing Pakistani currency would also help to overcome the issues of rising cost of doing business, energy and law and order that have already dampened the private sector’s appetite. He pointed out that only Textile sector is facing a loss of $4 billion in the absence of “remedial” measures by the government.
