After newly appointed finance minister Ishaq Dar issued a warning against manipulating Pakistani currency, the dollar further depreciated against the local currency on Thursday for the fifth session in a row. This led to the Pakistani rupee continuing its upward trend in the interbank market.
The dollar depreciated 3.12 versus the rupee and was worth Rs229 in intraday trade, up from the closing of yesterday at 232.12.
Ishaq Dar, the finance minister, issued a warning that currency manipulation would not be permitted.
The return of Ishaq Dar, a close ally of PML-N supremo Nawaz Sharif, to Pakistan as the finance minister has reportedly helped improve confidence, and the decline in global commodity prices has also fueled the rupee’s gain, according to currency traders and experts.
Fortunately, dropping international commodity prices and government administrative actions will likely keep the current account deficit under control.
According to The News, inflation has also likely reached its high and will begin to decline in the following months.
Dr. Khaqan Hassan Najeeb, an economist and former consultant to the federal ministry of finance, stated in an interview with Geo.tv that the first factor is a shift in market attitude brought on by a change in leadership at the finance ministry.
The previous advisor claimed that “the new team is viewed to be more sensitive of rupee movement and so leaning toward more orderly progress.”
Second, he pointed out that several fundamentals had improved, particularly the drop in oil and other important commodity prices, which may assist to lower the volume of imports.
Thirdly, international lenders’ confirmation to prolong flood assistance is a market-supporting move, according to Dr. Najeeb.
Last but not least, Najeeb noted that although it may seem fanciful, the International Monetary Fund (IMF) could alter its stance and be more forgiving in some circumstances as a result of the effect of the floods.