FPCCI warns factories closure as rupee crashes against dollar

FPCCI warns factories closure as rupee crashes against dollar

KARACHI: The Federation of Pakistan Chambers of Commerce and Industry (FPCCI) on Tuesday warned closure of factories in the country due to highly volatile rupee/dollar parity.

Suleman Chawla, Acting President FPCCI, in a statement said that the unprecedented volatility in rupee-dollar parity is playing havoc with the economy; and, now imports of essential commodities and industrial raw materials are also under threat, if the current bout of downward spiral continues.

He explained that the situation is so mismanaged and grave that many factories are under the risk of closures or will have to face financial penalties for not being able to keep up with their production schedules and export deadlines.

Acting FPCCI Chief noted with profound concerns that the rupee has crossed Rs. 224 per dollar in intra-day intra-bank market on Tuesday, till the issuance of this press release; which shows a depreciation of another Rs. 8.8 against USD.

He added that this should be treated as an economic emergency from all stakeholders and reiterated FPCCI’s stance that all parties should agree on a lowest common denominator, i.e. charter of economy.

He said that FPCCI is ever-ready to play its due role in making all stakeholders sit together in the broader national interest.

Suleman Chawla maintained that the business, industry and trade community had not yet recovered from Monday’s depreciation; which was Rs4.25 or 1.97 percent; and, today intra-day trading shows another depreciation of 4 percent. No country or economy can bear the brunt of exchange rate depreciation of 6 – 7 percent in a period of two days.

Acting FPCCI President has proposed that the government should announce the expected inflows of dollar through all sources to put a halt to the uncertainty, chaos and rumor-mongering in the market, i.e. IMF, World Bank, ADB, IDB; and, other multilateral & bilateral grants, loans and financing facilities.

Suleman Chawla emphasized that perception is mightier than the reality in the markets; and, the government needs to communicate and reach out to the markets to instill confidence and credence with regards to their financial management of the national accounts.

He also expressed his trepidations pertaining to various restrictive measures being applied by SBP to control the outflow of dollar. He agreed that FER need to be protected; but, not at the cost of export-oriented industries, disrupting industrial production and discouraging LCs & cash against document import scheme.