Upcoming budget: Rupee rate estimated at 91.5 against dollar

ISLAMABAD:

The federal government has estimated that the rupee will stand at an average of 91.5 against the US dollar in next fiscal year 2011-12, which is higher by four rupees compared to the value of Rs87.5 set for 2010-11.

Sources in the Ministry of Finance told The Express Tribune that the rupee-dollar parity is fixed every year at the time of the budget. Each upcoming fiscal year’s rate is estimated keeping in view the current trend.

They said that the purpose of fixing a parity rate is to have a fair estimate of development and other costs in the new fiscal year.

Sources said that the decrease in the value of the rupee would increase the cost of development projects. All calculations of imports, exports and foreign loans are made on the basis of the dollar’s value.

Economists said that if the greenback value increased by Rs4 against the rupee, it would bring about an increase in prices of necessary items, increase production cost and create more difficulties for the economy.

Published in The Express Tribune, May 17^th, 2011.