PAKISTANI RUPEE UNDER PRESSURE

By: Hassan Zubair

Karachi:  According to the analytical prognosis of the traders present in Karachi stock exchange, Pakistani Rupee is expected to remain under pressure for coming week as well. The uncertainty of political tension between IMF and Pakistani officials may keep Rupee under pressure in coming week as the negotiations on resumption of the financial programme is under discussion. Last week Rupee was for 180.57 against Dollar and now it has gone upto  Rs 181.78 last Friday.

Our analysts believe that due to the deadlock in discussions with International Monetary Fund(IMF) ,our Rupee may steer towards more unfavorable position as the foreign exchange reserves are being depleted as well. To some currency dealers the negative bearing of Rupee may cause our local currency to plummet down really low in coming weeks. Actually the delay in talks with the IMF ,which were supposed to procreate significant relief packages and amnesty schemes for the industrial sector, have somewhat lay down brakes on overall economy of Pakistan .Foreign funding has stopped by major institutions from around the World as they expected favourable   outcomes to those negotiating discussion with the IMF.

Unfortunately the tension raised higher when came the import bill . Pakistani Officials had no choice but to pay considerable attention towards the forth coming calamity .Since because of that import bill our current account deficit which, almost shrank on month-to-month basis in February, now widened on year-to year basis. If these imports remain unchecked then ultimately the consumption of huge foreign exchange and high prices of commodities will drain dollars out of our Country.

According to the State Bank of Pakistan the statistics are quite devastating as the state bank reserves declined by $869million to $14,962.4 billion on external debt. Foreign currency reserves declined by $844 million in March where as Foreign Reserve Assets dropped to $21.439 Billion .The current account deficit declined by 78% to $545 million is February which was $2.531 billion a month ago.

So clearly the statistics showed more steep slippage widening on year-on-year basis since it stood at $34 million in February 2021. However in just 8 months of Fiscal Year 2022 the current account deficiency crossed $12 billion. Such downward trend of foreign exchange indeed raised higher stakes for a country who is already under tremendous pressure of paying previous debts. According to some economists there are certain International Forex reserves but even those reserves won’t be enough to cover that shortage .However they may only be sufficient to  cover the imports for three months, only.

So it’s not hard to comprehend that who will pay the ultimately price after that period of time, through inflation and heavy taxation ; Public. Our officials seem to be keen on somehow giving relief to public for the Holy month of Ramadan so that after that when the bomb of inflation is to be triggered they would have a perfect excuse to cover previous deficits and downward trend of our depreciated currency by raising prices of every commodity possible and offcourse argue against the former performance  opposition parties in the past months of Ramadan . Since, no doubt , every month of Ramadan , for the past decade had been a test for our public because the inflation had its effects on even edibles .Which made it even more frustrating for the public to bear .