KARACHI : August 29, 2022: US dollar is continuing its flight against the local currency on 11 working session here on Monday.
According to the Forex Association of Pakistan (FAP), US currency soared to Rs Rs 222 (buying) and 222.50 (selling) in currency market at the closing of the working session. On last working day (Last Friday), dollar had ended up at 220 in the interbank trading.
The local currency is under pressure for the last two weeks or so. The rupee which was trading around Rs 212 at mid of August has lost 10 rupee against US currency .
There may be many factors playing to devalue the local currency but the most significant one of those is free import of 700 luxury items. The importers whose import shipments were held up at the ports in Pakistan for the last four months are now free t get pay taxes and get released their held up consignments.
The government strategy of first banning import of thousands of luxury items to strike a balance between imports and exports and stablise the rupee therein has backfired with lifting of ban after four months.
Miftah Ismail is not expert in dealing with such tricky issue and foresee what could be impact at the end of the day on the national economy . Secondly, its Dubai government decision to make it mandatory to all visitors to show 5000 dirham at arrival at Dubai airport.
Dubai government’s decision is hurting Pakistan’s fragile economy . According to FAP chairman , Malik Bostan Khan, around 25 million dirham are flying to Dubai after Dubai government decision of making it mandatory for all visitors to show 5000 dirham on arrival .
Local government is expecting good comeback of the rupee against US dollar once Pakistan reaches a formal agreement with International Monetary Fund (IMF) for release to it a tranche of $ 1.17 billion under extended funding facility (EFF0.
Subject to approval by the board of directors meeting today (August 29) , IMF can release to Pakistan remaining $ 3 billion of EFF.
Pakistan and IMF had reached an agreement for $ 6 billion last year and released $ 3 billion to Pakistan under EFF but it later cancelled the programme early this year, when Imran Khan government scraped the agreement for petty domestic politics.