Ru­pee Hits 100 Mark against USD

Southasia - - Briefing -

For the sec­ond time this year, the Pak­istani Ru­pee has touched the 100-mark against the U.S. dol­lar in the open mar­ket amidst con­cerns over a neg­a­tive bal­ance of pay­ment and an un­cer­tain po­lit­i­cal fore­front. The In­ter­na­tional Mone­tary Fund (IMF) has urged Pak­istan to take ef­fec­tive mea­sures to sta­bi­lize the coun­try’s econ­omy and form the ba­sis for fu­ture growth.

Since De­cem­ber 2011, the value of the Pak­istani Ru­pee has de­creased by nearly PKR 8.10 against the U.S. dol­lar fol­low­ing the fall in for­eign re­serves, pres­sure on pay­ment for open­ing li­cense of credit, and high de­mand of the dol­lar from lo­cal cur­rency mar­kets. Other fac­tors lead­ing to this de­cline in­clude im­port bills of crude oil, palm oil, in­dus­trial raw ma­te­rial, and other com­modi­ties.

The eco­nomic out­look of the coun- try ap­pears shabby as the lo­cal cur­rency has been de­val­ued by nearly 8.6 per­cent to date since the be­gin­ning of the cur­rent fi­nan­cial year. The rise in im­ports bill and pay­ment of In­ter­na­tional Mone­tary Fund’s (IMF) Standby Ar­range­ment (SBA) fa­cil­ity in­stall­ments have led to this un­prece­dented in­crease.

In ad­di­tion, re­duc­ing the Ru­pee value against the dol­lar in­clude eco­nomic fac­tors such as the de­fi­ciency of for­eign in­flows and an in­crease in the govern­ment’s non- pro­duc­tive ex­pen­di­tures. In­fla­tion­ary con­di­tions also show an up­ward trend which is an ad­di­tional bur­den on the coun­try’s frag­ile econ­omy.

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