Political situation behind rupee depreciation: SBP

By: News Desk
Published: 02:26 AM, 21 Jul, 2022
Political situation behind rupee depreciation: SBP
Stay tuned with 24 News HD Android App
Get it on Google Play

The State Bank of Pakistan has termed the current political situation as one of the reasons for the depreciation of the rupee against the dollar.

Officials of the State Bank of Pakistan said that the recent increase in the value of the dollar is not due to any precondition of the IMF, but to Pakistan’s import bill and political instability.

The by-election results have further deepened the uncertainty however officials refuted the impression that the central bank is doing nothing to control the value of the dollar.

SBP officials said that the current financial year 2022-23 will be the most difficult year in terms of the economy.

Inflation in the country has definitely increased due to the exchange rate but the foreign exchange reserves will decrease further if we control the value of dollars, officials added.

State Bank officials further said that Pakistan has taken tough decisions despite political rhetoric. Now we have to take a couple of more steps regarding further tightening the policy rate besides strictly implementing the monetary and financial measures.

Officials said that the IMF has no problem in working with any government. The IMF can also work with the caretaker government and the IMF board will approve the staff level agreement at the end of August.

Officials said that there was uncertainty in Pakistan’s policies since February, which badly hurt the confidence of the IMF. “The IMF was unhappy over giving the subsidy on petrol but we persuaded the fund team with great difficulty as they have the point of view that no country is giving subsidy on petrol.

Presently, all parties agree to deal with the IMF except the PTI, although the Imran khan party negotiated the IMF program, officials added.

Pakistan has fulfilled all the promises including the increase in petrol prices and the situation has improved now compared to February this year, officials added.

Pakistan’s external debt ratio is low compared to Sri Lanka and other countries. Sri Lanka defaulted because they failed to increase interest as well as an exchange rate in time and we should not use the word default for Pakistan.