Pak: Business community warns of Sri Lanka-like crisis as rupee in freefall
Jul 21, 2022
Karachi [Pakistan], July 21 : As the dollar touched an all-time high of 224.92 against the Pakistani rupee, the business community gathered at the Federation of Pakistan Chambers of Commerce and Industry (FPCCI) to analyse the looming threat of a Sri Lanka-like economic emergency.
FPCCI President, Irfan Iqbal Sheikh has called out the free-floating exchange rate of the State Bank of Pakistan (SBP) as the petroleum imports were being opened at a much higher rate than the interbank rate and have emphasised applying regulatory tools to minimise economic uncertainty, Dawn reported.
"We are not far from a Sri Lanka-like scenario and radical decisions are needed to reverse the situation," he warned, adding that the country does not even have enough foreign exchange reserves to cover two months of imports.
According to an FPCCI's press release, leading businessman Aqeel Karim Dhedhi blamed the Shehbaz Sharif government for the country's faltering economy and said that the government has failed to look into growing inflation.
"Despite a foreign exchange bloodbath, the government has failed to appoint a governor for the SBP, which reflects poorly on the government's seriousness in dealing with the situation," he said.
In another statement, Patron Karachi Wholesalers Grocers Group (KWGA) Anis Majeed said the landing cost of imported pulses had increased by Rs 7-8 per kg in the last 10 days due to continuous rupee deprecation against the dollar and its impact had not been passed to the wholesale rates by the traders due to uncertain future exchange rates.
Pulses imports have decreased by 29 pc to 897,352 tonnes (USD 611m) in FY22 from 1.266m (USD 709m) in FY21. The average per tonne price rose to USD 681 from USD 560.
In a statement, Korangi Association of Trade and Industry (KATI) President Salman Aslam, said the business community had serious reservations about the government's mysterious silence for not taking any steps to manage the declining economy.
The president of the North Karachi Association of Trade and Industry (NKATI), Faisal Moiz Khan, urged the SBP to adopt effective strategies to stabilise the rupee and curb the continued appreciation of the dollar.
The SBP needs to play its role as a regulator to prevent a further rise in the dollar price, he added.
The price of kerosene has been fixed at PKR 211.43 per litre, jumping 73 per cent since May 26 from PKR 118.31 per litre.
Also, the ex-depot price of light diesel oil has been set at PKR 207.4 per litre, increasing 68.5 per cent from PKR 125.56 per litre in May.
Since the Shehbaz Sharif government has come to power in Pakistan, the daily essentials are getting costly and have become out of reach of the common man due to recent hikes in petrol prices and power tariffs, a local media report stated.
The Russia-Ukraine war has also fuelled inflation at the global level, leaving the people of Pakistan in misery.
