Karachi: Pakistan’s rupee depreciated by 4.9 percent against the green back in 2011 despite relatively strong micro-economic factors witnessed in the first half of the current fiscal year 2011-12.
The rupee recorded constantly low levels, crossed 90 against the dollar to settle at 89.93 till today.
The rupee remained stable against the US dollar in the early part of the year while came under considerable strain in later part of the year.
The emergence of weakness in the external account along with SBP restoring the forward cover facility and impact of IMF’s loan repayment of US$1.2bn on forex reserves exerted pressure on the rupee towards the later half of the year.
Pakistan’s 2011 economic story swung in tandem with the changing dynamics of international commodity prices and it subsequent impact on the external account.
The country’s forex reserves rose to all time high of US$18.3 by mid-July 2011 while easing in the later half to around $16.8bn (mid-Dec 2011), losing $1.5 billion. On the fiscal side, deficit is expected to stand above 6.5% of GDP as against the initially envisioned target of 4% of GDP.
In 2011, 6-months T-bill declined by 146bps to close the year around the levels of 11.9 percent but went down to trade around the levels of 11.6 percent in late November. The yields on 10-year PIB reduced by 114bps to stand at 12.99%, during the period under review with low of 12.0% registered in November 2011.
