Karachi: The International Monetary Fund (IMF) in its country’s report on Pakistan has stated that PakRupee is overvalued by as much as 10% against the US Dollar when assessed its real effective exchange rate and external competitiveness.
According to Alfalah Securities Limited, the IMF reported that the recent forex reserve losses of USD 2 bn had been significant enough to drag PakRupee downwards however it was not allowed to fall freely, which indicates a possible intervention of the State Bank in protecting PakRupee against the US Dollar. It also suggested that the State Bank should let the demand-supply of PKR vs. USD more flexible in both the phases of depreciation and appreciation. Alfalah Securities Limited believes the PakRupee to further depreciate against the US Dollar when loan repayment to the IMF would commence from February 24, 2012 however, Alfalah Securities Limited foresees the State Bank would continue to show some support to PKR thus not preventing it from a free fall.