Finance: Productive politics needed

Recently, the rupee lost roughly 20 per cent value within seven trading sessions. It fell from Rs230.89 to a US dollar on January 25 to 276.57 per dollar on February 3 in the interbank market. The rupee lost this much value in just seven working days as the State Bank of Pakistan reintroduced market-driven exchange rates from January 26 on the International Monetary Fund’s (IMF) insistence. Foreign exchange reserves held by the State Bank of Pakistan (SBP) also fell from $3.678 billion on January 20 to $3.086bn on January 27, enough to cover less than three weeks of imports against the standard minimum of three months. Just three months ago, the central bank had about $8.6bn reserves. But external debt repayments, amidst drastically low external financing and declining exports and remittances, gradually brought the reserves down to the present low level.