SME conference: ‘Rupee devalued in line with global currencies’

SBP deputy governor dismisses notion that exporters’ demands were met.

LAHORE: The recent weakening of the Pakistani rupee is due to the global recession that has resulted in devaluation of currencies across the globe, including China, said State Bank of Pakistan Deputy Governor Saeed Ahmad Khan. 

Speaking at a Small and Medium Enterprisers Conference 2015, Ahmad said the perception that Pakistani rupee has been devalued upon the consistent demand of textile exporters is baseless. “The central bank is monitoring the increase in the dollar value and if needed, it will act immediately.”

However, he acknowledged the fact that the direct beneficiaries of the devaluation will be exporters.

Moreover, he stressed the need to impose heavy duty on luxury import items to shrink the import bill, adding that the increase in the SBP’s foreign exchange reserves is due to the positive economic policies of the government, which have made the economy sustainable.

Talking about the SMEs in Pakistan, he said this sector was only receiving 5% of the total landings, but it should be between 15-20%. “We are trying to achieve this target in five years and the process of forming a legislation for this purpose is already under way.”

He added that the central bank was considering giving indicative targets to banks, reviewing their performance against them after a certain period. The SBP might even consider formulation of a regulation to impose mandatory targets if they do not give favourable results, added the official.

Also present on the occasion, Small and Medium Enterprises Development Authority Chief Executive Officer Muhammad Alamgir Chaudhry said the SME sector was considered the backbone of Pakistan’s economy with 3.2 millon SMEs in the formal sector and innumerable ones in the informal sector.

“The apex body of small and medium enterprises goes an extra mile to be a helpful facilitator,” he added.

He also stressed on the amalgamation of all the scattered activities under one umbrella so that issues could be conveniently managed and results achieved.

According to the Securities and Exchange Commission of Pakistan, 96% of the registered companies are of the sole proprietorship category, which also shows that majority of the businesses in Pakistan are SMEs.

Published in The Express Tribune, August 26^th,  2015.

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