Pakistan’s rupee continues free flowing in the last two days after securing a bailout package from the International Monetary Fund recently.
The rupee and stocks fell, extending the week’s losses after the nation secured a bailout from the International Monetary Fund.
The country is expected to adopt tough measures as part of its deal with the IMF, which investors speculate may include further currency devaluation. It secured its 13th IMF bailout since the late 1980s for about $6 billion earlier this week after a six-month delay.
“The IMF programme was supposed to bring certainty. Unfortunately, until now there is confusion,” Arif Habib, chief executive office at Arif Habib Corporation said in a televised programme after meeting finance adviser Abdul Hafeez Shaikh as part of a business community delegation in Karachi on May 16. “We have asked the finance adviser to tell us what is going to happen. People have not been able to anticipate where the rupee and interest rates will stand.”
Pakistan’s benchmark stock index has erased half of its market value over the past two years as the deterioration in the economy prompted rating agencies to downgrade the nation. The currency has plunged more than 20 per cent in the past year.
The central bank on Monday is due to meet with economists from Intermarket Securities Ltd. and Foundation Securities Pvt. The firms are among those expecting a seventh straight hike in interest rates.
To check and control this situation a special committee has been formed by Prime Minister of Pakistan Imran Khan to check the rupee devaluation, has been given the task to ascertain whether the provision of carrying $10,000 by anyone who travels abroad from Pakistan can be slashed down to $3,000 as proposed by the Exchange Commission of Pakistan (ECAP).
ECAP president Malik Bostan said that by restricting the amount of cash carried abroad by individuals, $2bn could be injected into the local economy every year.
In the meantime, more Pakistani expatriates are rushing to banks and money exchange houses in the UAE to remit money back home in the wake of record fall in Pakistan rupee against US dollar.
The value of Pakistan rupee against one UAE Dirham has reduced to all time low to Rs39.48 on Thursday compared to Rs38.2 a couple of days ago. Bankers say the rupee is likely to fall more in coming days.
The value of the US dollar against the rupee touched all-time high to approximately Rs148 in the interbank market.
The greenback’s was valued at Rs141.5 Wednesday morning, but suddenly climbed Rs6.50 to hit a historical peak with speculations that the rupee will further slide.
“We have seen a good increase of people coming to remit money to Pakistan today,” said a salesman at an exchange company in Dubai. He said more people are sending money for family needs.