Thursday, July 7, 2022

Speculation on Rupee devaluation dies, investor shifts focus from hoarding USD


Zubair Yaqoob
The author has diversified experience in investigative journalism. He is Chief content editor at
With the influx of funds from Saudi Arabia and United Arab Emirates (UAE), the rumours regarding further devaluation of rupee have died, as the investors are shifting the focus from hoarding US dollar.


Besides, the strict measures taken by the government, to avoid FATF action and get out of the economic crisis, have discouraged the currency market manipulators.


Sources in the cash free market said US dollar is in surplus supply, therefore rumours spread by opposition that US dollar is at Rs145 are not having any impact.


Also Read: USD likely to trade in Rs138 and 139 range, positive news expected from Qatar: Malik Bostan


Analysts are of the view that country’s economic situation improved a bit following aid inflow from Muslim countries.


Even after receipts from China and Malaysia, Pakistan will have to go to the IMF, but this time there would be less pressure.


The caretaker government, before the election of PTI, had agreed to certain conditions of IMF including rupee devaluation and monetary policy tightening.


Pakistan has an international liability of $100 billion.


The dollar bonds and sukuk, which were floated at highest rates, are closing maturity while internal lenders are also a cause of concern, and all this is because of flawed policy of the previous government.


The government needs to take concrete and practical measures including attracting investment in CPEC, agriculture, manufacturing, tourism and construction sectors.


President Forex Association of Pakistan Malik Bostan Khan said Pakistan is reportedly talking $2-5 billion support from China, which is positive for country but the government should start making immediate arrangements for retiring these loans.


Also Read: China agrees to park $ 2.5 billion in Pakistan’s foreign exchange reserves


Malik Bostan said rupee had strengthened adding that in past dollar strengthened on speculation but now greenback is in surplus supply.


He hoped that Pakistan would secure a favourable package from IMF next month.


Also Read: Fruitless talks between Pakistan and IMF, more rounds to go


President Forex Association of Pakistan said the revision in property valuation by FBR would discourage home remittances.


He said FBR was only eyeing Rs25 billion additional revenue, but this step would push people out of tax net. This exercise would only benefit the bureaucracy.


Malik Bostan said instead of relying on the advice of few, had Imran Khan and Asad Umar sought input from the real estate sector, a sizeable inflow could be attracted into the sector from overseas Pakistanis.


He said inflows from overseas Pakistanis in real estate sector were suspended in the past ten months, due to which national kitty was deprived of millions of dollars.


He said the visit of Saudi Prince in mid-February will herald an era of development and progress in Pakistan.


Bostan said India should shake the friendly hand extended by Pakistan as this would benefit people of both countries.


State Bank of Pakistan said rupee value had improved but still the country was faced with current account deficit (CAD).


The spokesperson said the monetary policy statement had highlighted the economic and fiscal issues.


Also Read: Monitory policy: 25 bps up, SBP released economic data


About the reports regarding inflow of$2.5 billion from China, SBP spokesperson said it was premature to comment on that.


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