In a recent visit to the Korangi Association of Trade and Industry (KATI), Muhammad Aurangzeb, chairman of Pakistan Business Council, president and CEO of Habib Bank Limited and Pakistan Banks Association, emphasised the crucial role of a stable long-term economic policy in the country. During the event, prominent figures from the banking and industrial sectors, including KATI President Faraz-ur-Rehman, Deputy Patron-in-Chief Zubair Chhaya, Senior Vice President Nighat Awan, Vice President Muslim Mohamedi, former President Gulzar Firoz, Sheikh Umar Rehan, Saleem-uz-Zaman and others were in attendance.
Aurangzeb acknowledged the challenges faced by the industry due to the non-opening of letters of credit (LCs), which resulted in a lockdown of various sectors. He highlighted that international banks initially hesitated to confirm Pakistan’s LCs, but the confirmation process began a few months ago. As a positive development, documents for import LCs are now being cleared, indicating progress.
Praising the visionary approach of the late SM Munir, Aurangzeb stressed the absence of an alternative economic plan following the International Monetary Fund (IMF) agreement. Drawing attention to Bangladesh’s economic model, he commended its 12-year policy continuity and the significant role of women in driving economic development. Aurangzeb further emphasised the need for prioritising exports to achieve sustained growth.
Regarding the financial situation, Aurangzeb stated that the value of the Pakistani rupee is closely linked to LCs. While banks have resumed opening LCs, the government previously had to halt import payments due to a shortage of foreign exchange. However, the situation is now showing signs of improvement.
Aurangzeb expressed optimism that inflation would decrease by the end of the year, with a possible decrease in the interest rate anticipated for the following year.
Earlier, KATI President Faraz-ur-Rehman highlighted the vital role of the banking sector, which works hand in hand with importers and exporters. Over the past few months, he raised concerns about the prolonged non-clearance of LCs and associated documentation by competent banks, causing numerous problems for the business community.
Deputy Patron-in-Chief Zubair Chhaya shed light on the challenging conditions faced by industries in the current economic scenario. He also noted an increase in banks’ business but underscored the detrimental effects of issues related to LCs, imports, and markups on manufacturers. Chhaya expressed disappointment in the contrary outcome following the IMF agreement, as the anticipated decrease in the dollar value and inflation did not materialise. He particularly emphasised the significant impact on the small and medium-sized enterprises (SME) sector, emphasising the urgent need for remedial action.
Photo Caption: KATI President Faraz-ur-Rehman presents a shield to Mohammad Aurangzeb, President and CEO of Habib Bank Limited. Zubair Chaya, Nighat Awan, Muslim Mohammadi, and Sheikh Umar Rehan were also present.