Pakistan's Apex Trade Body Concerned Over Capital Outflow

November 18, 2007 8:59 a.m. EST

Karachi, Pakistan (AHN) - The Federation of Pakistan Chambers of Commerce and Industry (FPCCI), the country's apex trade body, has expressed serious concern over the outflow of dollars due to the investment weary behavior of foreign investors in Karachi Stock Exchange (KSE).

Tanvir Ahmed Sheikh, President FPCCI, indicated that outflow of foreign investment is being reflected clearly by the depreciation in Pakistani rupees in term of US dollar. The demand of dollar has increased in Pakistani market.

"It is not a short-term phenomena, it has its longer effects. The sudden outflow of dollar from the economy will affect the economy of Pakistan in different ways. If outflow of dollar is not stopped, the demand-supply gap in the money market may generate severe liquidity crunch in the financial market, which may affect the Karachi Inter Bank Offering Rate (KIBOR.)," the apex body chief was quoted by the Daily Times, a local newspaper, as saying.