Pakistan won't go for further rupee devaluation: Fitch Ratings

Pakistan won't go for further rupee devaluation: Fitch Ratings


Says substantive progress unlikely IMF deal unlikely in run up to elections due by October

NEW YORK/HONG KONG (Web Desk) – Fitch Ratings says it doesn’t expect Pakistan to devalue the rupee again after pressure on the rupee has eased – a report that echoes with the longstanding stance of Finance Minister Ishaq Dar who is a staunch advocate of a strong currency.

According to the Bloomberg, the US credit rating agency’s Hong-based official Krisjanis Krustins said, “We currently do not expect a large further devaluation of the Pakistan rupee.”

Krustins added, “The currency has been very stable over the past few months, (and) pressure on the reserves of the State Bank of Pakistan has also been contained, which suggests minimal interventions to support the currency.”

About the stalled talks with the International Monetary Fund (IMF), Krustins said, “We continue to assume that the IMF and Pakistan will conclude the ongoing programme review, likely after the IMF has clarity on the budget.”

“However, the window for this is rapidly closing, with the programme originally set to expire in June, and substantive progress unlikely in the immediate run up to elections due by October.”

Fitch Ratings’ analysis comes as Dar in his latest statement again said the actual exchange of dollar was around Rs240. The rupee has remained stable and is hovering in the range of Rs284-287 against the US dollar in the inter-bank market since falling to the lowest level of Rs298.93 on May 11. However, the currency has lost over 21 per cent of its value since Jan 1, making it one of the worst performers globally.

On Saturday, Dar said the government was working on a “Plan B” if the IMF did not release the pending loan.

Read more: Dar says budget growth-oriented, mentions Plan B if no progress made on IMF deal

He, however, avoided to explain or share any details, saying, “Plan-B is always there”. He stated that the features of the plan could not be talked about in public and again reiterated that Pakistan would not default.