Rupee Devaluation on IMF advice: Sources

Rupee Devaluation on IMF advice: Sources

Pakistan and an International Mone­tary Fund (IMF) delegation concluded the first round of discussions on the country’s economy, where Pakistan agreed to devalue the currency with respect to the US Dollar.

 Now members of the IMF delegation and Pakistan team are taking a two-day break to prepare for the policy-level wrap-up by Dec 13-14.

State Bank of Pakistan (SBP) would now let the currency exchange rate to adjust to market conditions after many months, rather years, of resisting expectations. The timing of the move was planned for Friday to ensure materialisation of $2.5 billion worth of receipts from two international bonds launched last month.

This calculated move allowed the currency rate to touch Rs110 to a dollar on Friday before settling down at around Rs107 and did not go beyond official estimates. The two weekend holidays would give a breathing space instead of over-steaming the exchange rate.

The sources said that the IMF had concerns over the health of Pakistan’s external sector, but the government authorities had different opinions. As the two sides concluded technical talks, the IMF team will prepare a report of its assessment over the weekend and share with Pakistan officials on Monday for the feedback and discussions.

While the government team, led by secretary of finance Shahid Mehmood will review the assessment, the IMF mission to Pakistan, led by Harald Finger, will visit Lahore next week for talks with provincial authorities including Chief Minister Shahbaz Sharif and independent observers and researchers from the business community and representatives of a private-sector university.