LAHORE - The constant fluctuation of the US dollar, which has witnessed a sudden rise and fall of almost 7 per cent just in a couple of months, has put the exporters in trouble, as they have been facing a loss of millions of dollars in few days due to instability of the greenback and uncertain atmosphere of money market.
The exporters suggested the government not to politicize exchange rate, as it could have serious repercussions on countries’ economy and balance of payment. Chairman APTMA Punjab S M Tanveer raising the concerns over fluctuations of the US dollar, said that rupee appreciation will ease inflation but textile industry cannot export inflation only. He asked the government to save the export-oriented industry, as already the textile exporters have started reporting closure of operations with sudden fall in dollar value. He said the government should announce a compensatory relief for industry like India and China. He said the textile industry needs a mechanism for reduction in interest rate and the cost of doing business.
PTA central chairman Sh Saqib Masood observed that sudden appreciation of rupee against the USD is adversely affecting the export sector and will cause huge losses for exporters. He said that exporters are unable to book new orders in this uncertain situation, which can lead to halting of export orders. The government should not influence in money market and stabilize the dollar against rupee at its normal exchange rate i.e, $1 = Rs.104.8, otherwise exporters will face huge losses, leading to closure of manufacturing units, She Saqib observed.
He said that sudden drop in dollar against Pak Rupee turned all export business in red and exporters suffered huge losses in last 10 days. Payments expected to be realized at Rs. 105 were received at 6% to 8% less value as against thin margin of profit which ranges from 1% to 2.5% due to energy crises and higher cost of doing business, he added.
Former Chairman of Pakistan Tanners Association Agha Saiddain also criticized the policies of government saying that authorities must realize that exporters cannot survive in turbulent exchange rate. He said exporters are not interested in devaluation of Pak Rupee but government must maintain exchange rate which is not so humpy and fluctuating. He said that both Rs. 110 against dollar and Rs. 99 against dollar are wrong for exporters. The customers asked for price reduction when Pak Rupee dropped suddenly and nobody is accepting higher prices due to weaker dollar.
He said sudden jumps and drop show that government has no control over exchange rate and policy maker take credit of free market situation and blame bankers when exchange rate goes up. He said policy makers have set exchange rate on auto pilot and nobody realizes difficulties that exporters are facing.
PAAPAM former chairman Syed Nabeel Hashmi, however said that our economy is tilted towards more imports rather than exports, as oil, most of the raw materials and inputs all are imported. Hence, the current dollar appreciation trend is good for all the sectors. Even our textile sector which seemingly is the largest exporter is heavily dependant on imports including machinery, raw materials, accessories etc., “As an exporter of engineering goods I am not much worried as my inputs become cheaper. Also my capital outlay becomes less.”
Group leader APTMA Gohar Ejaz said high rate of dollar had triggered inflation in Pakistan and the currency stabilisation policy of the government will kick start industrial activity on the country. He said Pakistan’s economy will be benefited from currency stabilisation and it will be good for the public at large.
Gohar said the economy has faced inflation at 10 percent during last 10 months, which has become part of industry’s cost of doing business. The inventory of inputs and raw materials of the textile industry were valued on the basis of exchange rate of Rs108 and therefore this inflation has become part of cost of business back to the 30th June level against the competitors like India and China possessing an effective revaluation and foreign currency mechanism. Gohar expressed the hope that the economic managers will also revise competitiveness and cost of doing business of textile industry in line with the rupee appreciation.