ISLAMABAD – State Bank of Pakistan breaks silence over the reports of Rupeeexchange rate against dollar agreed with the IMF.
State Bank of Pakistan has confirmed that the exchange rate is determinedby market forces of demand and supply and is a reflection of the existingBalance of Payment (BoP) position.
The central bank, in a tweet, said that forward exchange rates aredetermined by the existing spot rates and interest rate differentials ofthe relevant period i.e. time value of money.
In a series of tweets, SBP apprised that forward exchange rates (ER) arenot a forecast of future exchange rates.
The report on IMF on Pakistan includes ER assumptions which are notpredictions. Under the IMF-supported program, there is no agreed targetlevel for the exchange rate. ER is market-determined.
SBP further mentioned that IMF-Pakistan had earlier tweeted about theinclusion of exchange rate assumption in its published Staff Report onPakistan which said,
Read Top Stories
The published Staff Report on Pakistan includes exchange rate assumptionswhich are not predictions.
Under the IMF-supported program there is not agreed target level for theexchange rate, which is market determined.
The clarification comes in after a report was published in a local Englishnewspaper that the National Electric Power Regulatory Authority (Nepra) wasapprised that US 1$ will be equal to Rs. 170-172 by the end of the currentyear (2020) as per International Monetary Fund’s (IMF’s) and State Bank ofPakistan’s (SBP’s ) foreign exchange forward policy for commercial banks.
