The State Bank of Pakistan has made it clear that there is no threat to the economy, dispelling the impression that the value of the Pakistani rupee is heading towards a free fall against dollar and the Karachi Stock Exchange is going to collapse as an aftershock of the worst performance of the stock markets in China, Greece and the United States. A bank statement says that inspite of turbulence and panic in the global financial and stock markets, there is no threat to the national economy. It says that the macroeconomic stability, which has been achieved through sustained improvement in economic fundamentals during the last two years, is very much intact and the recent development in the global stock markets will not pose any serious challenge to it. The statement says that the bank is closely monitoring the movement of currency in domestic and international markets and the bank is also cognizant of the global trends in stock markets and their impact on the domestic economy.
The value of Pakistani rupee has been continuously falling in interbank and open currency markets for the last couple of weeks amid panic and turbulence in the financial markets across the globe. A phase of global recession started with devaluation of the Chinese yuan on August 11 which led to depreciation of dollar against the world currencies in the international financial market. The bank says that Pakistan is part of the global economy and the effects of the developments around the globe came in the form of depreciation of the Pakistani rupee against the US dollar, which has shown an overall depreciation of 2.6 percent just in one month. The country’s economy is stable and depreciation of the rupee is the result of international currency movements. The bank sees the external sector as robust and the country’s reserves are at historically high level. According to the bank, the value of rupee will remain stable, rather will go forward and it is keenly observing the international economic developments and its impact on the domestic economy.
It is good omen that the central bank has timely taken notice of the situation and the measures will definitely ensure stability in the financial and stock markets. There are the elements who want to take advantage of the situation and such elements must be brought to book. If the country has achieved stability, as it is being claims, a stimulus plan must be devised to push the economy forward.
