Pakistani rupee becomes the second worst performing currency in the world as The State Bank of Pakistan (SBP) devalues rupee for the fourth time since December. The value of the Dollar against PKR has increased by 6.45, sliding the currency further deeper into seemingly bottomless and helpless chasm.
In the previous six months, South Asian economies have significantly depreciated against US Dollar. Pakistani Rupee, however, has fallen by 15.26 per cent. The fall can be explained by concerning factors that are influencing it – like lack of trade and investment in the country, high unemployment and corruption, civil strife – all these factors combined making it hard to attract any foreign investment in the country.
The State Bank of Pakistan has also signalled to intensify external risks to the Profit with rising estimates from fiscal deficit to 5.5 percent from 6.8 percent, current account deficit for 11 months hitting the horrifying $16 billion mark, changing inflationary landscape in the wake of rising global oil prices and forex reserves further suffocated by imports.
The Finance Minister Dr Shamshad Akhtar suggests that for the upcoming government, the only way to tackle the situation is an IMF (International Monetary Fund) bailout.
As per the expert analysis, cement industry and the automotive industry is most likely to face the adverse effect. As the value of rupee continues to fall, the raw materials and parts are getting more expensive hence elevating the commercial prices.
Appeasing the IMF authorities, the analysts also predict a further decline in the economy and foresee the value of rupee to stand at Rs 130 by the end of this year.
What are your views on this? Share with us in the comments bar below.