LAHORE – April 22 (ONLINE) The Lahore Chamber of Commerce and Industry (LCCI) Friday feared that the dollar surge could reignite high inflation and halt growth by hitting all the important sectors of the economy.
In a statement issued here, the LCCI President Mian Nauman Kabir and others said that the recent surge in the prices of the greenback would not only jack up the input cost but it would also erode the profit margins.
“Exorbitant Depreciation of more than 20% has taken place in the last one year. The inter-bank dollar rate on April 21, 2022 stood at Rs. 186.96 as compared to Rs. 153.23 on April 21, 2021. In the last two months, a devaluation of more than 6% has taken place”, they said, adding that the main cause of the devaluation in recent times has been the political uncertainty.
Since our Industry heavily relies on imports of raw materials, components and machinery, this devaluation has resulted in an increase in the cost of production. The new Government should take all possible measures to strengthen the local currency.
They said that an unchecked increase in the dollar rates is multiplying the cost of doing business and badly affecting the industrial, manufacturing and agriculture sectors as Pakistan has to import oil, fertilizers, food items, machinery and industrial raw material.
They said that the government should take immediate measures to arrest further devaluation of the rupee to avoid more damaging consequences for the economy.
The LCCI office-bearers said though the weaker rupee benefits the exporters by giving them more rupees per dollar, but this benefit is neutralized by the costly imported inputs of the manufacturing sector including textiles thus eroding the financial advantage of a weaker rupee.
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