Islamabad, Pakistan: Just a day after the Finance Minister Asad Umar announced to approach International Monetary Fund (IMF) for a bailout package following the approval of Prime Minister Imran Khan, the US dollar has reached 134 against Pakistan rupee in Inter-bank market (US dollar hits 134 against Pakistani rupee). US dollar was not available in open market on Tuesday due to extreme pressure on buying and selling.
As per economic analysts, the government’s decision to reach out to the IMF would have a far reaching negative impact on the social-economic life of masses. The first hit of sky rocketing price of US dollar will be lower and middle class traders who deal in imported goods from China.
Since Pakistan is a consumer and service oriented economy therefore devaluation can seize economic activities in this South Asian country where foreign investors look shy to invest under new government that is busy to run wide-spread state sponsored campaign against politicians for taking them to task under Accountability process due to alleged corruption charges against former rulers.
Since the government will be bound to comply with certain IMF conditions, it will certainly lead to Pakistani rupee depreciation, inflation and further increase in taxes. The very first impact that has already been witnessed that the local currency has been depreciated and now US $ has soared to 134 against Pakistani rupee.
US dollar hits 134 against Pakistani rupee
Though it’s not even been two months since Pakistan Tehreek-e-Insaf (PTI) took over the realm of the State; however, Imran Khan-led administration has already been caught under fire for various tough decisions, it took.
Soon after its arrival, not only the PTI governments in the Centre and Punjab launched massive anti-encroachment drives but also initiated anti-corruption measures. In its mini-budget, the PTI also increased the taxes on a number of items. In addition, in a bid to overcome the defect of Rs 154 billion in gas sector, it increased the gas prices.
Earlier on Monday, the Finance Minister Asad Umar in a video message unveiled the government’s intention to initiate negotiations with IMF for the recovery and stabilization of national economy.
The finance minister said that the PTI government inherited 6.6 percent of fiscal deficit, more than Rs 1 trillion of unaccounted for losses in the energy sector and an unprecedented and debilitating current account deficit running at $ 2 billion a month. He said that to correct the underlying imbalances, fiscal and monetary actions needed to be undertaken without delay.
