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Currency devaluation

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13.06.2018

Pakistan’s central bank has devalued the rupee. For the third time since December. Yet even before this week’s latest move, the currency was the worst-performing in the whole of South Asia; according to data compiled by Bloomberg.

Nevertheless, the interim set-up seems convinced that the country will not need a fresh International Monetary Fund (IMF) bailout package. Thus the message is that the fall in the rupee’s value by 5.1 percent to 121.5 per dollar is worth it.

If only things were so straightforward.

In theory, the protectionist measure of currency devaluation is good for the economy in the short-term. For this translates into cheaper exports;........

© Daily Times