Rupee debacle
Neither is the rupee holding its ground, nor is it making any strides. It is complacent, and is getting weaker with every passing day. The Pakistani fait on Monday fell by Rs2.78 against the US dollar during interbank trade, enabling the greenback to get further bullish. The US currency posted its value at Rs291.27 in the day, and in the open market it was well above the psychological barrier of Rs300. This simply means that all of the quick-fixes adopted by the previous coalition government in its 16 months of turbulent rule were biting the dust. Likewise, the bourses and investors’ confidence in the economy remains at its lowest ebb as all seem to be perturbed with the prevailing equation of political instability, and are crisscrossed at the hands of an ailing and jaundiced legal tender.
Monday’s rupee downslide was seen through the prism of anxiety. It was the first day of business for the caretaker prime minister, and he is yet to form a cabinet. Nonetheless, he was quick in taking a call and convened a high-powered meeting of economic gurus, in an earnest attempt to abreast himself of the dilapidated state of the economy. The fall of the rupee to new lows was widely on the cards as the market forces were not too receptive to the Standby deal with the IMF, and the outgoing dispensation had literally failed to abide by the lender’s conditionality of ensuring the difference between the open market and the interbank market to one per cent. While the rupee remained in a fluid situation, the regulators and the finance ministry were seen guessing for a way out. Apparently, this is why sustainable measures coupled with stringent reforms are indispensable, and the interim set-up entrusted with special powers to take calls must look into this dilemma earnestly.
Restoring the health of the economy and pegging the rupee with the dollar on its true basis is unavoidable. What is desired is firm monitoring, buckling up of exports, and cracking down on hoarders of foreign currency. Only then can a semblance be set in.
Published in The Express Tribune, August 16th, 2023.
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