KARACHI, July 8: The Karachi Chamber of Commerce and Industry has expressed serious concern over free fall of the rupee against the US dollar.

In a joint statement issued here on Tuesday, KCCI President Shamim Ahmed Shamsi, Senior Vice President Iftikhar Ahmed Sheikh and Vice President Muhammad Haroon Agar criticised the government and the State Bank of Pakistan for not adopting proper measures and offering any resistance to stop the free fall of rupee against the greenback and called for preparing a roadmap to bring the country out of the economic crises.

They said Pakistan’s economy is import-based, and like exports, its imports are also highly concentrated in a few items like POL products (24 per cent), capital goods and machinery (30 per cent), raw material (16 per cent) and food items (7 per cent) which accounts for about 77 per cent of total imports.

The KCCI office-bearers said the rupee’s depreciation would further escalate import bills and cost of indigenous goods, thus eroding the competitive edge, both in local as well as global markets, besides further widening the current trade deficit.

They said as such it is more crucial situation for the export-oriented industry as it is mainly dependent on imported constituents to produce exports goods and thus the devaluation of rupee would not work to boost exports.

The Chamber’s office-bearers were of the view that the government had also failed to check the flight of capital which was also one of the major reasons for local currency depreciation causing it to lose its worth.

They were also critical that there was also no sign of intervention by the SBP to support the falling rupee as it had been a common practice earlier, and said it simply supports the assumption that the rupee would be allowed to fall to some required level.

They, therefore, proposed that the central bank should come forward aggressively to curb rising demand for the dollar by intervening in the market for support of local currency.

They also stressed the need for government steps to enhance foreign remittances to maintain depleting foreign exchange reserves and demand-supply gap.