The Pakistani rupee has long since digested the euphoria triggered by the announcement of the Saudi loan. It broke trend and rose for about nine days, waiting for the Saudi loan to bring the Fund round to our point of view, but when neither the loan nor the Fund’s approval came, it submitted to market fundamentals once again and duly resumed its epic fall. At the time of writing, it is once again down more than 3.5pc from last Friday’s (November 5) peak of 169.6, shooting past the 173.750 mark hit on October 27; its lowest point ever till Friday (November 12), when it’s hovering around 175.75 to the dollar.
Conspicuous by his absence in all this is the SBP governor. The money market is after all the Bank’s jurisdiction and the last any Pakistani heard from him was when he was lecturing expats, quite wrongly it turned out, about the benefits of a weakening currency for locals living in other countries. There was a time, not too long ago, when he claimed that the reforms introduced by his team ruled out intervention in the market to ‘control’ the rupee by providing any artificial support to it. Then it turned out that this team did just that a couple of months ago and was still not able to arrest the relentless fall of the rupee.
So now there’s no telling if he’s once again burning national reserves in the open market to put a floor under the rupee. All this while imports and debt are becoming more expensive while the collapsing currency has done nothing to improve exports. The SBP governor must be made to explain matters to the public and also shed some light on what the Bank is doing, or intends to do, about the present state of affairs. Governor Baqir was welcomed with much fanfare when he left a high profile IMF job in Cairo to serve the motherland. But he’s not exactly done justice to those expectations.
