US Dollar spike!
The latest increase in dollar value has hiked the debt burden on the country by billions of rupees. The price is set minute by minute by traders and investors who make bets on which way the market prices of a currency are headed.
But there are more powerful, longer-term forces at work driving those bets. The US Dollar continued its impressive run against the Pakistani Rupee in the currency market, after the USD value increased.
At interbank reaching the highest level in history at Rs 173.200. The value of the US dollar has been rising against PKR.
Foreign investors’ withdrawal of domestic loans and short-term investments from stock markets led to a decline in the value of the rupee. One more reason which is resulting in this rise in the price of the dollar is import orders. When the interest rate is cut, importers place orders and buy dollars, which also increases the demand for foreign currency and it becomes expensive.
However, under the current economic policy of the government, the Pakistani rupee will hover around 161. It may shade under 161 for some time but it will be stable around this figure for the year 2022.
Thus, I don’t take it as a sign of economic stability though. For me, the first real sign of economic revival will be a decreasing inflation rate which is around 8.66% nowadays.