The price of the US dollar on Tuesday appreciated by 15 paisas and the American currency reached Rs278.45 in the interbank trading. It is pertinent to note that Fitch Business Monitor International raised concerns that Pakistan’s current political turmoil could disrupt the country’s economic stability. In its latest Pakistan Country Risk Report, Fitch highlighted the critical state of Pakistan’s economic recovery, noting that urban protests have hampered economic activities. The report emphasizes that the political climate remains precarious, with the founder of Pakistan Tehreek-e-Insaaf (PTI) likely to remain imprisoned despite several successful legal appeals.

This scenario points to a continued coalition government holding power for the next 18 months, with no immediate plans for fresh elections. Fitch also outlined a possible scenario where a technocratic administration might take charge if the government changes. This implies that Pakistan's government will continue to implement IMF-mandated reforms, helping the economy to grow by 3.2% in 2024/25. The report projected that the policy rate could reach 16 percent this fiscal year and 14 percent next year, while the exchange rate has stabilized beyond expectations.

Credit: Independent News Pakistan