UNEXPECTEDLY and suddenly the Pakistani rupee plunged 3.1pc in the opening hours of forex trade on July 5 sparking a shortage of foreign currency in the market as dealers and traders prefer usually to hold rather than sell in such a situation.
By midday, the dollar had risen to Rs108.50 before settling at Rs108.25 by close. This was the largest single day drop in the last nine years in the rupee`s value.
Many economy observers must be wondering over the sudden and shocl(ing decline in the rupee`s value.
I believe that this surprising and intriguing fall in the rupee might have been the result of a planned and concerted speculative attack on the rupee by some people who have tons of money in order to make some quick money.
Pakistan is having a huge current account balance, which is expected to reach $8 billion by the end of Knancialyear2017.This current account deficit is a big challenge for the country`seconomic managers.
Pakistan has sufficient forex reserves to finance its current account deficit, which will start improving once the heavy machinery imported during the current knancial year is installed and starts producing goods for the export market.
The Pakistanirupee hasbeen reasonably stable during the last four years since this government came to power and the stability ofcurrency has played a significant role in stabilising the economy and putting it on a healthy growth path.
Pakistan`s economic fundamentals are strong and the future potentials of economic growth are positive. Therefore, the devaluation of the Pakistani rupee was neither warranted nor justified. I hope the rupee will recover soon and stay stable.
