The rupee fell by Rs2.1 against the dollar in the interbank market on Tuesday, sliding for the eighth consecutive session.

The local currency closed at Rs231.92 per dollar, down 0.91 per cent from yesterday’s close of Rs229.82.

FAP Chairman Malik Bostan said there was pressure on the import bill because of the floods, as a result of which the demand for dollars was rising. “Crops of cotton and wheat will be reduced this year which can increase the import bill and disrupt the balance of payments.”

The pressure could remain till friendly countries gave the $4 billion they had promised prior to the deal with the International Monetary Fund, he said.

Bostan said that if the condition of declaring foreign currency for incoming passengers was not removed, it could widen the difference in rates between the open and interbank markets. “The Ministry of Finance will need to address our concerns,” he added.

Former president of the Karachi Chamber of Commerce and Industry (KCCI) Abdullah Zaki also said the rupee’s value was declining in the aftermath of the floods.

Talking about the issues businessmen were facing, he said dollar rates were changing every day. “How can import be feasible [in these conditions]? If the exchange rate is not fixed, inflation can increase further.

“If our costs increase, we will pass them on to the consumers,” he said.

Zaki complained that commercial banks were opening letters of credit (LCs) after much difficulty. “We fear that if the hurdles in opening LCs are not removed, then the import of raw material needed for the export industry will be stopped.

“As a result, there will difficulty in completing export orders.”

The former KCCI president called on Finance Minister Miftah Ismail to “immediately” consult stakeholders and form a concrete policy to stabilise the exchange rate and end uncertainty.

The rupee has been losing ground against the dollar since Sept 2. It fell by Rs9.2 during the last week to close at Rs228.18. In the opening session this week, the rupee lost another 1.64.

Now you can follow Dawn Business on Twitter, LinkedIn, Instagram and Facebook for insights on business, finance and tech from Pakistan and across the world.

Opinion

Editorial

Fleeting good news
Updated 03 Dec, 2022

Fleeting good news

Indeed, there is no other option to get out of the economic mess we have created in the last few years.
Battle for spoils
03 Dec, 2022

Battle for spoils

THE spectacle playing out inside a London courtroom shines a light on the struggle for control of the assets of the...
CM Bizenjo’s complaint
03 Dec, 2022

CM Bizenjo’s complaint

BALOCHISTAN Chief Minister Mir Abdul Qudoos Bizenjo’s claim that his province is facing a financial crunch due to ...
Wayward ideology
02 Dec, 2022

Wayward ideology

Anyone who claims his legacy for themselves should not treat his words so whimsically.
Progressive stance
02 Dec, 2022

Progressive stance

THE timing of two encouraging developments in the fight against domestic violence in Pakistan could not have been...
China Covid protests
02 Dec, 2022

China Covid protests

PUBLIC protests are rare in China where the People’s Republic maintains order through a strict authoritarian code...