Rupee/$ Should Be Rs. 211 But IMF Prevents it: Tax Firm

Tax advisory firm Tola Associates claims the International Monetary Fund’s (IMF) market-based exchange rate policy has overvalued the US Dollar by Rs. 67 more against the Pakistani Rupee. In a brief market review, the firm argued that without IMF restrictions, the rupee-dollar exchange rate would have been at Rs. 211.5 by October. The firm said if the rupee had been valued at Rs. 211.5, inflation for July-October could have been reversed into a 4.67 percent deflation, lower interest rates below 2 percent, and saved the government Rs. 6.4 trillion for economic development. Tola Associates’ estimates are based on average rupee-dollar values from fiscal years 2022-2024. Tola Associates contends that without IMF conditions, the rupee would have remained much lower than Rs. 278/$ in 2023-24. The firm also suggested that had the rupee been valued at Rs. 211.5/$, Pakistan could have saved Rs. 475 billion in debt repayments through lower interest rates.