KARACHI: The rupee’s struggle to remain strong could not succeed for the third consecutive session, and the dollar appreciated by 27 paise in the interbank market on Monday.
The State Bank of Pakistan (SBP) reported the closing price of the dollar at Rs285.64, compared to Rs285.37 the day before, leaving market experts undecided about the future of PKR in the coming days or weeks.
Currency dealers were uncertain about the current exchange rate, which appears stable with slight variations. Some market experts identified reports about the expected inflow of billions of dollars from Saudi Arabia and the United Arab Emirates as investments and said the impact of this report failed to stir currency market sentiments.
Commentators and analysts showed little enthusiasm about the inflows, mainly due to prevailing political uncertainties that hurt economic growth.
“We are not working at full strength, and the same is the case with most industries in the country. How is it possible to convince a foreign investor to put money in such a risky economy like Pakistan?” said Amir Aziz, an exporter of finished textile products.
Currency market experts expressed disappointment that the economic managers of the country are still undecided about the correct value of PKR and providing unbelievable possible inflows of investments up to $50bn from the Middle East.
At the same time, former finance minister Ishaq Dar, blamed for exchange rate blunders during his tenure, stated that the PKR is undervalued.
Speaking in the Senate session on Monday, Mr Dar advocated for a strong PKR without considering the weak fundamentals of the economy. He argued that the devaluation of PKR does not support Pakistan like it supports China, as the country heavily depends on imports for its huge exports.
During his ministry in the previous government, he attempted to bring down the dollar value, but it proved counterproductive as importers enjoyed cheaper dollars, and exporters held back their export proceeds. The dollar reached as high as Rs307 in the interbank and Rs330 in the open market during his last days in the government.
Mr Dar, in the Senate, stated that the devaluation of PKR is the mother of all evils since it has destroyed 91 per cent of the economy.
Published in Dawn, November 28th, 2023
