Friends of Economics & Business Reforms (FEBR) President Kashif Anwar has urged the government and State Bank of Pakistan to ascertain the factors weakening the rupee’s value and check the possibility of undue speculations and panic buying.

Huge rupee devaluation had caused a big blow to the economy and badly affected the manufacturing sector, as the raw materials prices and the cost of doing business had increased in the country, he said in a statement received by WealthPK.

Devaluation not only halted growth by hitting all the important sectors of the economy, but also caused high inflation, import costs and petroleum prices, Kashif said. The rupee should be strengthened to restore confidence of the business community, he added.

He said that an unchecked increase in the dollar rate would multiply the cost of doing business and badly affect the industrial, manufacturing and agriculture sectors, as Pakistan imported fertilizers, food items, oil, machinery and industrial raw materials.

The government should take immediate measures to arrest further devaluation of the rupee to avoid more damage to the economy, and even the fixation of the dollar price by putting an end to free-floating may be done, he suggested. Kashif was of the view that the dollar’s value should remain well below Rs 200.

He said the weaker rupee benefits the exporters by giving them more rupees per dollar, but that benefit is neutralized by the costly imported inputs of the manufacturing sector including textiles.

If the greenback continues its upward flight, it will certainly inflate the import bill and lower the competitiveness of Pakistan’s businesses, he added.

Credit: Independent News Pakistan-WealthPk