KARACHI Federation of Pakistan Chambers of Commerce and Industry (FPCCI) on Saturday bitterly criticized the double whammy of the currency devaluation and interest rate hike terming it devastating setback for the troubled economy.

It expressed serious reservations over rupee devaluation and an upsurge in the interest rate to 10 percent which will trigger inflation, increase the cost of doing business, hit production and push up anxiety among businessmen.

“Doing business in the country is becoming difficult by the passage of every day while interest rate hike and weakening of the local currency would send negative signals,” said Ghazanfar Bilour, President of FPCCI.

He said that rupee has experience largest single-day plunge in almost a decade which will result in economic distress that will last for several years like witnessed in the past. It will increase the debt burden and jack up the cost of all developmental projects.

“Largest currency devaluation in intra-day trading would have negative economic implications, it will make imports costlier while it will give little benefit to the export sector,” he added.
Ghazanfar Bilour said that interest rate hike would discourage private sector borrowings, hamper industrial production, and increase unemployment.
“The decision of the authorities would neither help curtail fiscal deficit nor control inflation as such experiences have failed in the past,” he said, adding that government should stop further devaluation and bring down the interest rate before it’s too late.
The government must ensure consistency in its economic policies, he demanded.
Bilour said that vague and contradicting statements, misdirected steps and the inability of the government to decide the future’s line of action will further damage the economy and hit its popularity.