SITE Association criticize rupee devaluation, interest rate hike
KARACHI: SITE Association of Industry Karachi has expressed deep concerns on rupee devaluation and interest rate hike, as this would hurt exports and deter investment in import substitution industries. Saleem Parekh, President SITE Association, said that frequent devaluation was disturbing the entire system and inflation was going unbounded and no strings could be attached to control the inflation. He said that industries had not fully recovered from previous devaluation and this devaluation would affect in the most severe manner as the raw materials would suddenly become very expensive. “In addition, interest rates increased by 1.5 percent would make industries further non-competitive, as investment will go towards money markets and bank deposits; and banks would lend even more to government rather to industries and corporate sector”. He added that, increase in interest rate would further deter investment in import substitution industries. Parekh said that SITE Association of Industry had suggested government at different platforms to prepare a comparison chart of regional economies for evaluation of cost of doing business. “Also a thorough study of import substituting industries needs to be conducted for making a policy framework to encourage investment in industrial sector”. He said that these kinds of steps would further result in de-industrialization, which was certainly not the manifesto of this government. He pointed that according to a recent report of Pakistan Banking Council, manufacturing sector contribution has gone down from 17.5 percent in 2005 to 12.1 percent in 2018.