Business

PBIF: Rupee devaluation an outdated idea

The dollar appreciated Rs5 recently, but again exports did not improve, rather nosedived

Ppi February 22, 2016

PHOTO: REUTERS/FILE

ISLAMABAD:

The devaluation of currency to spur exports is an outdated idea, contrary to the national interest, declared Pakistan Businessmen and Intellectuals Forum (PBIF) President Mian Zahid Hussain.

“Exchange rate weakness provides little relief to exporters while it increases debt, payable interest and make imports costly,” he said and added exports could be increased through difficult decisions, reforms and disciplinary action against the responsible authorities.

The demand of export managers for devaluation of the rupee was nothing but an attempt to camouflage their inefficiency, he said.

“One dollar was worth Rs60 during the Musharraf’s government and it stood at Rs105 during the PPP’s administration, but exports remained stagnant. The dollar appreciated Rs5 recently, but again exports did not improve, rather nosedived; that proves the point.” He was of the view that semi-literate export managers had never tried to tackle weaknesses in manufacturing, energy production, tax policy, brand development and product diversification.

Published in The Express Tribune, February 23^rd, 2016.

Like Business on Facebook, follow @TribuneBiz on Twitter to stay informed and join in the conversation.

COMMENTS (1)

asad rizvi | 8 years ago | Reply In Pakistan Exporters are enjoying numerous types of concessions. SBP Benchmark Rate or Discount Rate is slashed to almost half, they enjoy subsidized refinancing facilities and Rupee too is substantially depreciated, which was/is one of the major causes of inflation. Exporters are required to deliver and perform by improving the quality of its product to meet international standard and they have to deliver by all means, as they enjoy extraordinary facilities in various shape of subsidies. Currency Data of last 15 years suggest that Depreciation of Rupee went waste. Instead it made life of common Pakistani miserable due to excessive weakening of Rupee resulting inflation that sent prices roaring, as Food, Housing, Education and items of Daily use is beyond the reach of large part of population. Here is the comparison of Pak Rupee versus Indian Rupee & Bangladesh Taka. In 2001, One US Dollar would buy PKR 61.92, INR 47.19 and BDT 53.84. And as of Today, One USD would fetch PKR 104.37, INR 66.40 and 78.49. This means in 15-Years Pak Rupee was Depreciated by 68 pct against Indian Rupee 45 pct and Bangladesh Taka 44 pct. Whereas, in terms of Economic gains then India Forex Reserves was USD 44.1 Billion. Bangladesh had to defer its payment to Asian Clearing Union (ACU) for imports to avoid compromising the $1 billion foreign exchange reserve as that would undermine its global image. Now thay are sitting around USD 27 Billion, which is not against borrowings. We do boast of USD 20 Billion Fx Reserves of which USD 3.5 Billion against Bond, USD 5 is borrowed from IMF, Deposit against customer known as FE 25 is USD 6.1 Billion and another 3 Billion is from Donor agencies that totals to around USD 18 Billion. Exporters, Wake up and Deliver, instead of fooling the Nation and crying foul all the time.

Replying to X