KARACHI: August 25, 2023: US dollar gained another Rs 0.75 in interbank to take its value against the rupee to Rs 301 at closing of the first session trading session on Friday.
Its for the first time in Pakistan’s 76-year history that US dollar crossed Rs 300 mark. The rupee is losing its value to US dollar for the last three consecutive weeks. Similarly, the rupee is losing its value in the open currency market on a fast speed.
Currency market sources told NEWSMAN that the banks instead utilising their stocks are asking importers to buy dollars from open market to get opened letter of credits (LCs) and it was pushing dollar value up in the local market.
US dollar has appreciated by Rs 11 since August 1 in interbank and Rs 21 in open market. It’s the worst performance of the local currency against US dollar.
The State Bank of Pakistan claimed the other day that removing of restrictions on imports is stoking US dollar price in the market.
Data released by All Pakistan Currency Dealers Association (APCDA) on Friday suggested that with appreciation of Rs 0.70 US dollar reached to Rs 301 in interbank. However, in open market, US dollar remained pegged to its last day’s value of Rs 314 against the rupee.
Since Pakistan is undergoing a serious financial crisis for long the caretakers are revisiting the economic policies to make necessary corrections.
Caretaker Finance minister, Dr Shamshad Akthar and caretaker state minister for Finance , Dr Waqar Masood Khan, are extremely professional and they enjoy lifelong experience to deal with Pakistan’s issues relating to its economy. Both Dr Shamshad Akhtar and Dr Waqar Masood Khan are closely working to address major issues relating to the economic recovery and they are likely to announce their economic strategy to steer the country out of the current crisis in next couple of weeks.
It’s extremely important for the caretakers economic team to look some window to pull interest rate down from 22 percent to some reasonable level. Substantial reduction in interest rates will divert major portion of financing of the banks from lending to the government to real borrowers like agriculture, businesses and industrial sectors. High interest rate is hurting Pakistan like a double -edge sword. On one hand its making lending for the real sectors of the economy impossible as no business , trade or any industrial activity is possible in Pakistan as long as interest rate is there. Second , higher interest rate is giving unreasonable profit to the banks and the people are its major loser as money being doled out to the banks by the government against huge borrowing is draining down from the public paid taxes.
