Not even finalization of \u201cprior actions\u201d with IMF (International Monetary Fund) or the arrival of $4.2 billion of Saudi aid money has been able to halt the fall of the rupee, which makes record lows almost every other day. And even though government spokesmen tend to make a big deal of the odd days when it does stop and reverse a little, they fail to explain that these are, so far, only very minor lower highs in a very strong downtrend. And there\u2019s nothing yet to suggest that this slide would end anytime soon. Any hopes that friendly petrodollars would provide some sort of support to the local currency have also been squarely dashed and left the advisor on finance as well as the state bank governor with some egg on their faces. Because the only thing they\u2019ve conveyed to the public is that they are as much in the dark as them about what is really happening to the Pakistani rupee.
\nMeantime the import bill, and therefore the current account, are throwing even the government\u2019s best made plans terribly off track. For we\u2019re already way past the 2-3pc of GDP band that the current account was supposed to stay inside for the whole fiscal year. And record imports pushed the trade deficit to record highs as well this past November. Of course one still hears that remittances are also breaking records to the upside and exports should respond to incentives and weak currency sooner or later, but these assurances have been coming for months and so far the market has not been impressed by them.
\nThe most plausible explanation is that local financial markets are behaving the way they are because they are gripped by uncertainty; the one thing that upsets them even more than bad news. And in this case the government \u2013 both fiscal and monetary authorities \u2013 have not helped matters at all. On the contrary, they have gone the extra mile to give false assurances to the point that traders and investors have begun taking them for the boy that cried wolf.
\nIt is, therefore, very important to note that while fundamentals remain weak, authorities should not try to mislead the market with promises that they have no intention of keeping. The best thing to do right now would be ensure transparency about the real state of the economy as well as the fate of our bailout loans and the many conditions associated with them.<\/p>\n","protected":false},"excerpt":{"rendered":"
Not even finalization of \u201cprior actions\u201d with IMF (International Monetary Fund) or the arrival of $4.2 billion of Saudi aid money has been able to halt the fall of the rupee, which makes record lows almost every other day. And even though government spokesmen tend to make a big deal of the odd days when […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[8],"tags":[722,1552],"class_list":{"0":"post-232185","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-editorial","7":"tag-rupee","8":"tag-uncertainty"},"yoast_head":"\n