KARACHI: Even after crossing the Rs200 mark, the US dollar did not stop moving ahead with gaining another 48 paise against the local currency in the interbank market on Tuesday.

In the open market, the dollar was traded at Rs202.00.

The State Bank of Pakistan reported the closing price of the dollar at Rs2001.41 compared to Rs200.93 a day earlier. Currency dealers said the situation for the exchange rate has not changed as the country is in strong grip of uncertainty particularly on political side while weak external account is also haunting the importers.

There is a regular complain from importers that opening a letter of credit (LC) is becoming difficult with the passage of each day. The shortage of dollar while getting higher prices discourages importers.

For reducing the consumption of dollars, the government imposed a ban on the import of luxury and non-essential goods while the SBP increased the interest rate on Export Finance Scheme, Long-Term Financing Facility by 200 basis points and policy rate by 150 basis points. It was decided to arrest the rapidly increasing inflation but the industries and manufacturers reacted sharply.

Federation of Pakistan Chambers of Commerce and Industries (FPCCI) President Irfan Iqbal Sheikh has expressed his profound disappointment and concerns over an anti-business and anti-growth move of hiking the key policy rate by 150bps to 13.75pc.

He said that the business, industry and trade community is shocked and, clueless at the same time on how to cope with its fallout on economic activities, viability of doing business in Pakistan and its inevitable adverse impact on exports.

Our reporter adds from Lahore: The industry leaders said on Tuesday that the raising of interest rate would make the country noncompetitive with those states having much lower policy rates.

“Pakistan’s policy rate is comparatively higher than regional countries such as Malaysia at 2pc, China at 3.7pc, India at 4pc, and Bangladesh at 5pc. The country will not be able to compete with the regional countries with high interest and export refinancing rates,” said FPCCI regional chairman Muhammad Nadeem Qureshi in a statement on Tuesday. “We reject the State Bank of Pakistan’s (SBP) decision to raise interest rate to 13.75pc, as it would not be in favour of domestic businesses and industries,” he added.

Lahore Chamber of Commerce and Industry President Mian Nauman Kabir also rejected the hike in policy rate and said the government decision will badly hit the trade and industry alike. “The business community will not be able to get cheap money and this will halt industrial expansion,” he added.

Published in Dawn, May 25th, 2022