With interest rates creeping up and a persistent weakening of the rupee, the authorities are struggling to manage market sentiments. Unfortunately, this is not the end, and the drip-drip of bad news will continue in December. On December 14th, the SBP is likely to announce another hike in interest rates (we project a further 150 bps increase). On December 20th or 21st, the SBP will release its November BoP data where the current account deficit (CAD) for the month could be as high as $2.2 to 2.6 billion, and at some point, December’s inflation data will also be released, which could be above 12.5 % YoY (year-on year). Â
In response, Shaukat Tarin has blamed banks for driving interest rates up, claimed that demand for dollars from Afghanistan is weakening the rupee, and said that the rupee should be at Rs168/$. He also warned that the authorities had formulated a policy response that will hurt those people who are speculating against the rupee. These are fighting words, but they are unlikely to change market sentiments or arrest the trajectory of both the money and foreign exchange markets. The fundamentals are siding with the markets. The content in this publication is expensive to produce. But unlike other journalistic outfits, business publications have to cover the very organizations that directly give them advertisements. Hence, this large source of revenue, which is the lifeblood of other media houses, is severely compromised on account of Profit’s no-compromise policy when it comes to our reporting. No wonder, Profit has lost multiple ad deals, worth tens of millions of rupees, due to stories that held big businesses to account. Hence, for our work to continue unfettered, it must be supported by discerning readers who know the value of quality business journalism, not just for the economy but for the society as a whole.To read the full article, subscribe and support independent business journalism in Pakistan
