Karachi: US Dollar Continues To Hit Pakistan rupee For the fourth session in a row in the interbank market on Wednesday as the market pegged hopes for the country’s upcoming Finance Minister Ishaq Dar.
in the interbank market The rupee rose 1.79 to close at 232.12 per dollar, according to Bank of Pakistan (SBP) data, after it rose 7.53 in a week of succession.
Traders and currency analysts claim that the return of Dar, a close aide to PML-N supremo Nawaz Sharif, has kept Pakistan accountable as the finance minister helped improve confidence and a fall in commodity prices. International Commodities Raise the Rupee
The current account deficit — fortunately — is likely to remain in the scrutiny of falling international commodity prices and government administration measures.
Inflation is also trending at its highest and is expected to decline in the coming months, The News reported.
talk to Geo.tvDr Kakan Hassan Najib, an economist and former adviser to the Federal Treasury Department, said the first aspect was a shift in market sentiment, driven by a leadership change at the Treasury Department.
“This new team is more conscious about the movement of the rupee. and hence leans towards more organized movements,” the former adviser said.
Second, he noted that some fundamentals have improved. In particular, lower oil prices and other important commodities prices. This may help reduce the amount of imports.
“Thirdly The confirmation by multilateral lenders to extend flood support is a development that supports the market,” said Dr Najib.
Finally, this is quite a distant thing. But the possibility of reconsideration and easing in some conditions by the International Monetary Fund (IMF) as the flooding effects are driving positive sentiment towards the rupee, Najeeb added.
Al-Falah’s head of research, Fahad Irrfan, said Dar would not have as empty hands as he had earlier.
“The IMF is generally much more stringent in terms of policy implementation. Most importantly, Pakistan now has a free forex regime. Even though the country has historically low forex reserves. And there is no room to burn to control the exchange rate,” he said.
“however Tighter supervision and scrutiny on the manipulation and smuggling of dollars out of Pakistan is still possible,” Irfan added.
He said the rupee was expected to recover partially. The rhythm of gratitude also accelerated.
He noted that the change in position was significant. In times of disasters, floods and an extremely fragile economic environment. It might help Dar to regain some of its lost popularity, however, this might slow down policymaking.
Dar kept the rupee at 100 per dollar throughout his period (2013-2017) and kept the policy rate at a record low of 5.75% from May 2016 to December 2017.
This deadly combo is the main reason Pakistan has a record-breaking current account deficit of $19.2 billion, or 6.3 percent of gross domestic product, in fiscal 2018, and has cut its foreign exchange reserves to just two months of imports.