Local currency cannot be left at mercy of market forces: PBIF

President Pakistan Businessmen and Intellectuals Forum (PBIF), Mian Zahid Hussain on Monday lauded the decision of the government of not letting market forces to determine the exchange rate of the local currency.

The demand of the exporters to devalue the currency for boosting exports is based on unfounded assumptions at it gives a temporary relief but it inflicts heavy losses, in the long run, he said.

Mian Zahid Hussain said that there should be a limit to the devaluation as it increases cost of exports which are more than double of the exports, it jacks up the cost of imported raw material, slows growth rate and makes exports costly for many industries.

Devaluation also adds to the cost of debt servicing which is a major concern for the policymakers as it continues to grow to unsustainable limits, he added.

The business leader said that country continued to devalue the currency to spur exports since 1970 which has transformed the country into a market for other nations. This has created a perpetual problem of trade and current account deficit which is being tackled through remittances and loans.

He said that government should not accept the demand of IMF and exporters for further devalue rupee and take steps to stop any such attempt by the SBP on July five that caused uncertainty in the market and worried business community.

Mian Zahid Hussain said that banks are preferring investment in treasury bills, investment bonds, the stock market and currency market while ignoring the productive sectors which is impeding growth.