Situationer: Currency market cries out for dollars amid liquidity crunch
Countries like Pakistan cannot imagine an economy without dollars, but the situation is heading fast in this direction and policymakers either look helpless or are simply waiting for the economy to default. This was the crux of currency market’s feelings on Friday.
The State Bank of Pakistan (SBP) governor, while assuring the nation that the problem is being overblown, has said dollar outflows have emptied the central bank’s wallet. On July 22 alone, $754 million flew from the SBP reserves and the total further fell to $8.57 billion, which is enough only for five weeks of imports.
July proved to be the worst month of the new fiscal year (FY23) for the local currency as it lost 14.14 per cent in value against the US dollar. The rupee has lost 26.26pc during the calendar year and 36.38pc since May last year.
What is more important is that the calculations are based on official dollar rates reported by the State Bank, but the actual rates are much higher than the reported ones.
Retrieve dfrom: https://www.dawn.com/news/1702262
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