KCCI slams SBP governor’s statement on exchange rate fluctuation

KARACHI: The Karachi Chamber of Commerce and Industry (KCCI) on Thursday expressed concerns over the statement of State Bank of Pakistan Governor Dr Reza Baqir regarding increased fluctuation in exchange rate, a statement said.

KCCI president Muhammad Idrees said that the overseas Pakistani send around $8 billion remittances, which registered an increase up to 11 per cent due to the rupee depreciation.

He said: “Even though remittances increased up to 11 per cent, the import bill of the country also increased 65 per cent. The central bank should not try to justify wrong policies, and should not make policies for certain people but rather for the interests of the whole country,” he added.

There is little benefit and huge losses on the rupee depreciation, and the dollar rose up to Rs174 in recent months from Rs152, while foreign debt increased to $13.5 billion from $12.5billion, he added.

“We import several items, especially food commodities, and even raw materials for exports. In the first quarter of 2021/22, our imports reached $19 billion against the previous year’s $11 billion.”

“Imports are more or less the same but the cost of production has increased, resulting in inflation. We will not be able to export if inflation keeps rising at this pace,” he said.

Idrees stressed that the prime minister, finance minister in consultation with all the stakeholders should take decisions to overcome these hardships. The economic, political and socioeconomic situation of the country is very bad, he said.

The KCCI president also warned of the gas crisis in the coming days and said it will not only have a negative impact on exports but further increase inflation.