The manufacturer of Toyota brand vehicles in Pakistan, Indus Motor Company (IMC), has declared that all bookings for its cars in Pakistan have been suspended.
Bookings have been stopped for the next fifteen days, according to IMC CEO Ali Asghar Jamali, a step was based on currency fluctuations.
His statements come as Pakistan’s currency falls to a historic low over the Us dollar on Thursday, ending at 188.18 in the inter-bank market. The drop increases the rupee’s overall loss to about 6% in around five weeks, pushing manufacturers that rely on imported components and equipment to reconsider their cost and pricing structure.
IMC, a significant participant in Pakistan’s automobile market with sales second only to Pak Suzuki in the current fiscal year, is also of a record-breaking month in March when it sold over 7,000 vehicles.
“IMC is really proud to share another record-breaking month with 7,132 vehicles sold in March 2022 – most since its start in 1993,” the company tweeted just two days earlier.
The change occurred in March, when IMC raised auto pricing on new bookings in the previous week, blaming rupee devaluation and increasing freight expenses. The rupee was trading at 181-182 versus the US dollar at the time. Since then, the rupee has devalued by more than 3%.
Pakistan has suffered huge economic difficulties, with inflation remaining in the double figures for the previous five months. Its currency has lost more than 19 percent in less than one year, and the current account deficit for the 8 month period (July 2021-February 2022) has reached $12.1 bn, compared to a surplus of $994 mn in the same time the previous fiscal year. The central bank’s foreign exchange reserves have also plummeted to $11.32 bn, the lowest since June 2020.
In an emergency meeting on Thursday, The State Bank of Pakistan hiked the main interest rate by a staggering 250 basis points raising it to 12.25 percent, citing deterioration in the inflation forecast and increased threats to external stability.
These occurrences coincide with the National Assembly’s (NA) dismissal of Prime Minister Imran Khan’s no-confidence motion, which was then dissolved by the president. With the country further pushed into political chaos, the Supreme Court overturned the NA deputy speaker’s order on Thursday, restoring the PM and his cabinet to their positions.