On December 3, 2013, one US dollar traded at Pk Rs. 108.58, but since then the value of Pakistani currency has appreciated by about 10 percent and on May 21, 2014, it was being traded at Rs. 98.75 for one US dollar.

 

Pakistan’s carpet industry is trying to cope with the increasing cost of production owing to high electricity tariff and struck up sales tex refunds, and the sudden decline in the US dollar’s value against the rupee has added to the problems, PCEMA chairman Akhtar Nazir Khan Cooki said in a statement.

 

Mr. Cooki said carpets are a luxury item and they are normally sold on long-term credit ranging from six to nine months. Hence, payments that were expected to be realized at Rs. 108 were received at about 10 percent lower value, compared to the thin profit margin of 1-2.5 percent, causing great loss to carpet exporters.

 

PCMEA vice chairman Kamran Razi said the benefit of decline in dollar value has not been passed on, as the prices of imported items, especially petroleum products, have not decreased comparatively. He said the Government can help the industry by reducing the rates of petroleum products and electricity tariff by 10 percent.