On Monday, the State Bank of Pakistan (SBP) denied having anything to do with the Pakistan Rupee’s (PKR) appreciation versus the US Dollar (USD). The central bank denied rumors that it had sold any dollars in the market, according to a report released by Topline Securities after the Monetary Policy Committee (MPC) decided to keep the policy rate at 15 percent unchanged.
According to Topline’s citation of the central bank, the rupee’s strengthening was caused by a decrease in speculative components, stringent administrative procedures, and control of the foreign exchange market.
The current account deficit may be mitigated by international aid in the form of current transfers, claims SBP.
SBP forecasts that the foreign exchange reserves will increase with secured external borrowing and increased commitments. In response to the floods, the Asian Development Bank (ADB), World Bank (WB), and Asian Infrastructure Investment Bank (AIIB) each promised to contribute $1.5 billion in aid or finance, $1 billion to $2 billion, and $0.5 billion, respectively.
The report also notes that Pakistan has paid $4.6 billion of its planned debt payments since July 2022 and that it plans to continue to do so.
It is important to note that Ishaq Dar, the finance minister, has recently repeated his claim that the real value of the US dollar is less than Rs. 200. The devaluation of the Pakistani Rupee has been attributed by the finance minister to market manipulation.
The central bank is currently investigating eight banks for their alleged role in exchange rate manipulation.
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