ISLAMABAD: Former President of Islamabad Chamber of Commerce and Industry (ICCI) Dr Shahid Rasheed Butt on Sunday said the exchange rate erosion is becoming a threat to the economy.
Continued hike in the value of the dollar can become a threat to sovereignty if not controlled therefore, the government should immediately take steps to arrest the decline of local currency, he said in a statement. Butt said that dollar has cross the mark of Rs167 and it may increase if steps were not taken to stabilize the rupee.
The situation is triggering inflation and will ultimately force of central bank to increase interest rates which will damage economic activities. The masses are coming under pressure of price hike as imports are double than exports, he said, adding that strengthened the dollar is also increasing the cost of debt servicing.
Experts were trying to understand why the rupee has been falling against since May as the foreign exchange reserves have grown rapidly with SBP holdings soaring to an all-time high.
Presently, nobody can ascertain the limit of devaluation of local currency as the inflow of high cost of imported goods is creating inflation. He said that the increased value of dollar is due to the economic situation, increased demand by importers, the indifference of central bankers towards the issue, and smuggling of US currency to Afghanistan.
Prime Minister Imran Khan and Governor SBP must control the sharp rise in the value of the US dollar against the Pakistani rupee otherwise the country’s economy would not be able to sustain, he observed.