Textile exporters oppose further rupee depreciation

KARACHI: Value-added textile sector on Saturday opposed a government’s plan to let rupee depreciate further, saying it will push up cost of imports rather than boost exports.

“Devaluation of currency can help only one-time while foreign buyers demand discounts,” said Jawed Bilwani, chairman of Pakistan Apparel Forum, which represents Pakistan Hosiery Manufacturers and Exporters Association, Pakistan Readymade Garments Manufacturers and Exporters Association, Pakistan Knitwear and Sweater Exporters Association and Pakistan Cotton Fashion Apparel Manufacturers and Exporters Association. Bilwani said rupee depreciation increased cost of imported raw materials used in manufacturing of exportable goods, which are made of imported raw materials, including dyes and chemicals.

The industry official said foreign buyers took, in shape of discounts, half of the advantage of five percent rupee depreciation in December last year, while prices of imports went up more than 70 percent.

The official said the government should bring down the cost of utilities including electricity, gas and water to improve exports. He said the government has yet to settle billions of rupees in refund claims of exporters related to sales, income and withholding taxes and duty drawback.

Value-added textile sector demanded separate utilities’ tariffs for export-oriented industries. “Tariffs for textile industries should be at least 20 percent less than that of competing countries in the region.”

Bilwani said if government still desires to devalue the currency it should gradually be depreciated. There may be a 0.416 percent in rupee depreciation every month if government targets five percent.