Karachi October 4 2022: Pakistan Rupee continue to appreciate for the eight consecutive session in interbank against dollar as newly appointed finance minister said that dollar will soon come below level of 200 amid expectation of aid flows and concessions from IMF.
However, the odds of Pakistan facing a currency crisis in the next 12 months now exceed 50% following floods that killed thousands of people and displaced millions more, a Bloomberg Economics risk model showed.
The United Nations and Pakistan will present a revised appeal for the ‘Floods Response Plan’ in Geneva on Tuesday (today), seeking $816 million to control a surge in water-borne diseases following the country’s worst floods in decades, the UN resident coordinator for Pakistan announced yesterday.
“Pakistan Rupee soon will be below level of 200 against the dollar” says Pakistan’s newly appointed Finance Minister Ishaq dar.
He added,” We have to kick out speculators from the market, at the moment the value of Rupee could not be determined through Real Effective Exchange Rate (REER). There are several other means to determine the value of currency.”
“In every case, value of Rupee is less than 200 but i could not disclose its right value now. We will bring it through fundamental changes rather than artificial measures.” he states.
Pakistan Rupee appreciate PKR 2.01 or 0.88 percent in interbank to trade at 225.28 at PST 11:25 against yesterday closing of 227.29. In the last seven consecutive session rupee gains PKR 12.42 or 5.18% from recent low of 239.71.
However, In Open Market Rupee gain 50 paisa to trade at 228.5 at PST 11:40 against yesterday closing of 230.5.
The probability of a currency-crisis episode involving a very large depreciation of the nominal exchange rate and extensive depletion of foreign-exchange reserves could climb to about 59% by June 2023 from 29% in August, economist Ankur Shukla wrote in a note. Shukla used a currency risk model initially applied to Pakistan but will be expanded to other emerging markets.
“Crop damage and a host of other problems stemming from the disaster all but erase any progress toward stability that came with the IMF’s aid,” Shukla wrote in a note on Tuesday. “Much of the progress toward stabilizing external balances has been undone by the floods.”
The dollar index – which measures the currency against six peers including sterling and the euro – was about drop 0.41 or 0.37 percent to 111.33, below than Monday’s low of 111.46, a level last seen on Sept. 23. It had soared to a two-decade high of 114.78 last Wednesday.
