The US Dollar continued its upward trend against the Pakistani Rupee on Friday, gaining a record 25 paisas in the interbank trading. The local currency had appreciated by 1.21 percent on Thursday, halting the US Dollar’s advance. However, it bounced back the next day after Saudi Arabia pledged $2 billion in funding to Pakistan. The new price of the US Dollar against Pakistani Rupee is Rs284.42 after losing Rs3.43.
The appreciation of the Pakistani Rupee on Thursday was largely attributed to hopes that the country was moving towards securing a Staff Level Agreement (SLA) with the International Monetary Fund (IMF). However, the IMF sought written guarantees from friendly countries of Pakistan before securing any SLA with the Finance Ministry of Pakistan.
Prime Minister Shehbaz Sharif and Finance Minister Ishaq Dar expressed optimism that the country would soon sign the much-needed IMF agreement. The agreement would provide Pakistan with a financial lifeline and help stabilize the economy.
Pakistan’s foreign reserves have dipped to US$9.7 billion, highlighting the country’s dire economic situation. The government has been struggling to revive the economy, which has been hit hard by the COVID-19 pandemic. The rise in the US Dollar’s value against the Pakistani Rupee will make imports more expensive and further burden the economy.
The recent Saudi pledge is a much-needed boost to the country’s foreign reserves. Pakistan has also received aid from China and the United Arab Emirates in recent years. However, experts have warned that relying on aid is not a sustainable solution to the country’s economic problems.
To address its economic challenges, Pakistan needs to focus on increasing exports, attracting foreign investment, and improving tax collection. The country has immense potential in sectors such as textiles, agriculture, and IT, which can be leveraged to boost exports.
Furthermore, Pakistan needs to improve its business climate by addressing issues such as corruption, bureaucratic red tape, and security concerns. Investors need to feel confident about investing in the country for sustained economic growth to occur.
In conclusion, the appreciation of the US Dollar against the Pakistani Rupee highlights the challenges faced by the country’s economy. While aid from friendly countries provides temporary relief, long-term solutions are needed to stabilize the economy. Pakistan needs to focus on increasing exports, attracting foreign investment, and improving the business climate to achieve sustained economic growth.
