Since the nation can no longer tolerate the sharp devaluation of the Pakistani rupee, businessmen have urged that the government implement a fixed exchange rate regime for 15 days in place of the current floating exchange rate in order to control the economy.
Suleman Chawla, the acting president of the FPCCI, issued a statement warning that if the dollar strengthened more and was sold over Rs. 230, as was seen in the inter-bank market on Monday, there would be no choice but to boost petroleum and power costs even further.
“The government must fix the dollar exchange rate for 15 days to cope with the situation,” stressed Chawla. “We, as a nation, do not have many choices and the government must act now decisively.”
Saqib Naseem, the chairman of the Pakistan Yarn Merchants Association (PYMA), expressed dissatisfaction over the State Bank of Pakistan’s (SBP) carelessness and the absence of effective measures to stop the US dollar’s value from rising. He claimed that the rising dollar put SMEs, industries, and enterprises at risk.
Since businesses and industrial activities were being negatively impacted, particularly small and medium-sized firms (SMEs), he demanded that the SBP take decisive action to stabilize the currency.
He warned that the commercial and industrial community was facing significant difficulties as a result of the depreciation of the rupee, which raised the cost of doing business.
Dr. Abid Qaiyum Suleri stated to The News Agency that “altering the free float exchange rate system is not possible because the current system is market driven.” “It is based on the supply and demand of dollars.” He believed that by using reserves to artificially inject dollars into the market, the SBP could manipulate the situation.
“SBP provides dollars to commercial banks to create equilibrium. However, today we have dollar reserves for an import bill of only five weeks,” he said.
The conclusion of an IMF agreement, which was anticipated in a few weeks, would offer some relief, he said.
According to Suleri, the SBP would not be able to act in the market under the current structure because the rupee was losing value quickly.
Chawla stressed that any benefits made as a result of the recent sharp decrease in the price of oil internationally would be lost since the government lacked the capacity to distribute the alleviation to the general populace due to the weakening of the rupee.
The acting FPCCI chief claimed that businesspeople and industrialists throughout Pakistan were in disbelief over the government’s economic mismanagement, bad leadership, lack of caution, and lack of vision because only by maintaining the exchange rate of around Rs. 190 would the government have been able to lower petroleum prices by at least 5%.
Saqib Naseem urged the SBP to take action to maintain the rupee and stop it from falling further in order to save the industries, particularly SMEs, and lower the cost of production.
To read our blog on “In light of PKR’s worst weekly decline since 1998, State Bank discourages dollar trading,” click here.
