LAHORE: Pakistani Rupee is likely to be affected with a steep fall in thevalue of Turkish lira in the last two weeks.

Economic experts believe that it’s after effects may impact the Pakistanieconomy in the shape of a possible currency devaluation.

“Pakistan’s current account deficit is among the highest in emergingmarkets (EM) countries, and the currency is sliding. The Turkish lira isnow the cheapest currency in EMs, but the Pakistani Rupee is only fairvalue.

It would need to fall another 30 to 40 per cent to be as cheap as theTurkish lira. Luckily, Pakistan’s central bank has been allowed to respondappropriately with interest rate hikes and allowing the currency to weaken.These measures and a potential IMF deal, might allow Pakistan to avoid acrisis, says Charlie Robertson Global Chief Economist, Renaissance Capital.

On August 13, the Turkish currency stood at 6.95 liras for one US dollarafter falling 1.39 liras since August 9, igniting fears that the effects ofits fall may be felt in other emerging markets as well.

Turkish companies that have borrowed dollars from European banks to fuelgrowth are finding it harder to repay the loans as lira loses value.