IMF suggests a lot less than anticipated rupee fall

According to the IMF report, at the end of the current fiscal year, the average exchange rate could be Rs. 160.64 to a dollar.

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  • Recently, the Pakistani rupee has strengthened by 6.9% or Rs. 11.9 as compared to the value of the rupee in June this year.
  • The IMF still recommends a 3.8% average reduction in the value of rupee in the remaining period of the current fiscal year.
  • Under the IMF-supported program, there is not an agreed target level for the exchange rate, which is market-determined- IMF report
rupee

According to the IMF report, the average exchange rate could be Rs.160.64 to a dollar at the end of the current fiscal year. This rate is considerably low as compared to the prediction of the IMF while designing the $6 billion loan program.

Recently, the Pakistani rupee has strengthened by 6.9% or Rs.11.9 as compared to the value of the rupee in June this year.

However, the IMF still recommends a 3.8% average reduction in the value of rupee for the remaining period of the current fiscal year.

Rupee is stabilizing

According to the IMF report, the rupee is relatively stabilizing and a new valuation of Rs.160.64 is better than market expectations.

In July this year, the IMF said, “the published staff report on Pakistan includes exchange rate assumptions which are not predictions. Under the IMF-supported program, there is not an agreed target level for the exchange rate, which is market-determined”.

Both the IMF and the PTI government believe that during the tenure of the PMLN, exports were under-performing which caused the devaluation of the rupee. However, despite a substantial depreciation since January 2018, the exports are still not doing well.

However, the valuation of the rupee was only possible due to the reforms introduced by the government of the PTI. Moreover, an increase in exports and a decrease in imports have also played a significant role in the improved economy.


Also See:

Government To Introduce Additional Taxes Of Rs. 150 Billion To Meet The IMF Target

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