Govt working on trade strategy as political uncertainty fuels rupee’s depreciation

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APP11-200722 ISLAMABAD: July 20 - Federal Minister for Finance and Revenue Miftah Ismail addressing to the press conference at Press Information Department. APP photo by Umar Qayyum

ISLAMABAD: As the Pakistani rupee continues to plunge against the US dollar, Finance Minister Miftah Ismail blamed political uncertainty for the massive plunge of local currency against the US greenback — which slumped to an all-time of 224.92 on Wednesday. In a phone interview with Bloomberg, Miftah said: “In terms of the real economic fundamentals, we are fine but the political uncertainty screwed us up.” “Fundamentally the rupee is fine, there is not much pressure on rupee in the market and we should be okay, and I think that there may be some reversal,” he added. The finance minister told Reuters that the rupee downturn is not due to economic fundamentals. “The panic is primarily due to political turmoil, which will subside in a few days.” Later addressing a press conference, Miftah reiterated that the local currency had depreciated against the dollar whereas it had strengthened against Pound, Euro and Japanese Yen. He said the US dollar has witnessed a 22-year high appreciation against all currencies, however, admitted that the current political situation in the country was one of the reasons for rupee depreciation. While quoting the State Bank of Pakistan (SBP), Miftah said that in terms of real effective exchange rate the rupee has depreciated by 3% since December keeping in view inflation.

 

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