Market reacts to fuel price subsidy, amnesty for industrialists
KARACHI:
The decision of the government to freeze prices of petroleum products is seemingly taking a toll on the rupee, which slumped to a fresh all-time low at Rs178.98 against the US dollar in the inter-bank market on Monday.
According to the State Bank of Pakistan (SBP), the rupee had closed at Rs178.51 on Friday.
A report of Arif Habib Limited stated that the rupee shed 0.27% day-on-day while it was down 11.98% since the beginning of current fiscal year in July 2021.
Speaking to The Express Tribune, Arif Habib Limited Head of Research Tahir Abbas said that the rupee was under pressure due to ongoing talks between Pakistan and the International Monetary Fund (IMF).
“Market believes that the global lender will call for further devaluation of the rupee owing to the subsidy granted on fuel prices and the amnesty scheme for industrialists, announced by the government,” he said.
On the other hand, there was no respite from the rising global commodity prices, which maintained their uptrend, thus mounting pressure on the rupee. If prices remained at the current levels, the import bill of the country will increase manifold.
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