LAHORE, May 6: The convenor of carpet committee, Lahore Chamber of Commerce and Industry, Mohsin Banday on Friday said that 5 per cent increase in export refinance rate during the last three months had created a difficult situation for carpet manufacturers, which might lead to liquidity crunch in the industry and affect exports.

In a statement, he said that every dollar was fetching the exports of Rs70 including the duty drawback before 9/11. The duty drawback had phased out during the past four months reducing the worth of dollar to less than Rs59 affecting the carpet export income, manufacturing operations and wages bill.

He said that increase in export refinance rate from 3 to 8 per cent was the second blow to the carpet industry after the duty drawback withdrawal. There were also the rumours of increase in export refinance rate to 10 per cent which if materialised would deprive the carpet industry of whatever advantage gained over the Indian and Chinese competitors by adopting the neo-classical designs.

Industry spokesman Naeem Tahir said that the government should announce a special package for the industry as the decline in carpet exports as a result of phasing out of duty drawback and increase in export refinance rate would hit 1.5 million workers of the labour-intensive industry.