The Pakistan Industrial and Traders Associations Front (PIAF) has said the rupee witnessed volatile trend in the process of trading against dollar and other major currencies. In a joint statement issued here, Senior Vice Chairman of PIAF, Nasir Hameed and Vice Chairman Javed Siddiqi said that massive fall of rupee value continued to damage the economy, as the rupee witnessed a huge depreciation against the greenback.
Nasir Hameed observed that besides increasing exports and controlling imports the government will have to take administrative measures, as a large demand of cash dollars are seen in the market. He said that there was a complete breakdown of economic policymaking, as the country’s fiscal policy had become subservient to monetary and exchange rate policies.
The Senior Vice Chairman of PIAF said that the monetary tightening and exchange rate depreciation resulted in higher inflation, public debt and debt servicing. The empirical evidence showed that the one percent monetary tightening hiked the inflationary pressure by 1.3 percent in the case of Pakistan, he added.
He said that the US dollar continued to rise against the rupee, reaching a record high in interbank trade amidst growing current account deficit. “The government needs to devise a strategy on war-footing to increase foreign investment in Pakistan so as to stop the upward trajectory of the dollar,” he added. Javed Siddique urged the government to control volatility of rupee against the US dollar, as the industrial revival and economic growth is not possible without stability of local currency. He said that the massive devaluation of currency fuelled inflationary pressures, adding that two major factors contributed to the price hike. —INP
