According to Blomberg, Goldman Sachs said in a statement that the massive appreciation of the Pakistani Rupee against the US Dollar is short-lived as it will drop in the upcoming future due to Pakistan’s finances.
The Pakistani Rupee had an astonishing run in the last few weeks as it was termed as the best performing currency in the world after its appreciation against the USD. This appreciation is said to have been a direct effect of the crackdown initiated by the Pakistani Government on black market deals.
In a report on Wednesday, Goldman analysts suggested that this appreciation is going to be short-lived because of the skyhigh interest rates and the upcoming deal with the IMF. Alongside that, Pakistan seems to have kept a balance now by external bilateral financing.
Rise of Pakistani Rupee
The Pakistani currency went to a record low recently but appreciated massively in the month of Sep and Oct. This made it the best performing currency, not just in Asia but also in the entire world. The Pakistani Rupee soared in the last month and appreciated by an astonishing 9% since August. After. Pakistani Rupee, the Afghani Afghan has been the second in this race.
However, there are several risks ahead as investors are nervous of the upcoming future due to the tentative elections that are to be held next year in January. Moreover, dollar inflows and remittances are muted which makes the country depend on foreign aid for the influx of dollars. An IMF team is all set to visit Pakistan in the upcoming month to monitor its economic progress for the upcoming approval of the next transactional loan from IMF.
Experts suggest that the Rupee is likely to trade between 275 and 285 till the next loan from the IMF is approved. Moreover, the World Bank has also suggested to tax the agricultural sector of Pakistan. World Bank Suggests Taxing Pakistan’s Agriculture and Real Estate