Pressure on Pakistani rupee may decrease in August

Finance Minister Miftah Ismail expressed his continued faith in Pakistani rupee’s (PKR) ability to withstand pressure despite the PKR continuing to hit historic lows versus the US dollar and suffering its biggest weekly slide in more than 20 years.

The finance minister stated in an interview with Radio Pakistan that the political climate and the fact that import payments are being made for shipments beginning in June are both contributing factors to the pressure on the PKR.

“Import of $80 billion were made during the last fiscal year. We are still making payments for energy commodities purchased last month. Therefore, the rupee is under pressure. However, as we are importing less in July, its effect would be reflected from next month or, I should say, next week.”

“The rupee’s fall is connected to the political situation as well. Before July 17, the situation wasn’t like this,” he added.

Miftah also spoke about Pakistan’s economic issues, stating that the poor export base continues to be a matter of concern.

The local currency has continued to depreciate against the US dollar, losing 7.6 per cent last week, more than what businesses typically account for in terms of annual currency depreciation, as the inter-bank market experienced a turbulent five sessions due to renewed political uncertainty and increased worries about Pakistan’s external financing needs.

He also revealed that one friendly country is ready for an instant investment in Pakistan.

It is worth noting that Pakistan anticipates receiving the next International Monetary Fund (IMF) tranche before the end of the following month following the board meeting.