The latest increase in dollar value has hiked the debt burden on the country by billions of rupees. The price is set minute by minute by traders and investors who make bets on which way the market prices of a currency is headed. But there are more powerful, longer-term forces at work driving those bets. The US Dollar continued its impressive run against the Pakistani Rupee in the currency market, after the USD value increased by Rs5.90 at inter bank reaching the highest level in history at Rs167.50. The value of the US Dollar has been rising against PKR.
Foreign investors’ withdrawal of domestic loans and short-term investments from stock markets led to a decline in the value of the rupee. One more reason which is resulting in this rise in the price of dollar is import orders. When the interest rate is cut, importers place orders and buy dollars, which also increases the demand for the foreign currency and it becomes expensive. Under the current economic policy of the government, the Pakistani rupee will hover around 150.
It may shade under 150 for some time but it will be stable around this figure for the year 2020. But I don’t take it as a sign of economic stability though. For me, the first real sign of economic revival will be a decreasing inflation rate which is around 12% nowadays.
Javairia Mahboob
Lahore
