As reported by Bloomberg, Pakistan’s rupee has weakened and gone down to record low after the central bank continues to ease its grip on Pakistan Rupee. The economic pressure is growing and so are reports and rumors that Pakistan might need International Monetary Fund support.
In Karachi after three days of continuous loss, the rupee value remains same that is 109.5 per dollar. Since Friday Rupee has performed the worst globally.
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Pakistan has been facing economic challenges for years but now deficits have increased and foreign-exchange reserves are declining. So much that they are not even half of that of Bangladesh. Since 2014, the rupee was Asia’s most stable currency but now it is going down.
Hasnain Malik, the Dubai-based head of equity research at Exotix Capital said, “The decision to allow the rupee to ease is a belated response to the deterioration in current account and pressure on foreign reserves. This move should have come earlier, but now is better than delaying it further with more trade and capital restrictions.”
Moreover, Pakistan General Elections 2018 are coming in August and Prime Minister Shahid Khaqan Abbasi has denied that Pakistan will need an IMF loan. As just last year Pakistan took $6.6 billion loans that prevented 2013 balance-of-payments crisis.
Still, some experts feel that Pakistan will need financial aid to get out of this economic turmoil.
The World Bank in October estimated that Pakistan needs $17 billion of foreign aid or 5 to 6% of the gross domestic product to bridge its debt payments and current deficit.
This year Pakistan is looking to increase its exports by 10% as tax relaxations are given to businesses.
Hamad Aslam, research director at Elixir Securities Pakistan Pvt Ltd. in Karachi believes that rupee will stabilize but then will go down again to 114 per dollar before the Pakistan elections 2018.