Rupee continues to appreciate against the dollar
The US dollar lost more ground against the Pakistani rupee on Wednesday despite the country suffering severe economic losses as a result of devastating floods.
According to data from the State Bank of Pakistan (SBP), the rupee decreased from yesterday’s close of 220.12 to 218.75 per dollar after gaining 1.37 during the interbank market.
According to government authorities, the flood damage is estimated to have cost more than $10 billion. They also said that the globe had a responsibility to assist the South Asian nation in coping with the repercussions of man-made climate change.
The International Monetary Fund’s (IMF) Executive Board’s permission to issue the crucial $1.17 billion tranche was a critical factor in the rupee’s upward trend.
Pakistan is anticipated to get funding from global and bilateral organisations in addition to friendly nations with the restart of the IMF programme.
Dr. Khaqan Hassan Najeeb, an economist and former consultant to the federal ministry of finance, stated that while the IMF programme’s restart would undoubtedly help Pakistan increase its dwindling foreign exchange reserves, the flood destruction has heightened the country’s need for external assistance.
He told Geo.tv that a significant amount of motorbikes and four-wheelers are sold in rural regions, adding that a slowdown in demand from rural areas is anticipated in the upcoming months along with the anticipated slowdown in agricultural growth.
The analyst added that range-bound trading is anticipated on the Pakistan Stock Exchange while the nation assesses the effects of the damage and the slowdown in the economy.
Zafar Paracha, general secretary of the Exchange Companies Association of Pakistan (ECAP), had previously told Geo.tv that he anticipates the local unit to continue appreciating and drop to 200 in the upcoming days.
Paracha emphasised that the government’s efforts to tighten its belt after the contract finally materialised after much delay resulted in an upsurge in smuggling.
In addition to the smuggling of dollars to other nations, Paracha claimed that the high regulatory import taxes increased commodity smuggling, which contributed to the dollar shortage.
Although the loan from the international lender was $1.1 billion, he pointed out that it would open the door for Pakistan to get more funding from other multilateral and bilateral organisations.
According to Paracha, foreign direct investment will rise as well, and she anticipates that the general economy will improve over the next few days.
