Islamabad, Dec 5: Tax advisory firm Tola Associates has argued that the International Monetary Fund’s (IMF) market-based exchange rate policy has caused the Pakistani Rupee to be overvalued by Rs. 67 against the US Dollar. The firm claims that without IMF restrictions, the rupee-dollar exchange rate would have been Rs. 211.5 by October 2024.
- Impact on Inflation and Interest Rates: Tola Associates suggests that at a rate of Rs. 211.5, inflation for July-October 2024 could have reversed into a 4.67% deflation, with interest rates dropping below 2%. This scenario could have saved Pakistan Rs. 6.4 trillion for economic development.
- Debt Repayment Savings: The firm also estimates that the lower rupee value would have saved Rs. 475 billion in debt repayments, thanks to reduced interest rates.
Tola Associates bases its estimates on average rupee-dollar exchange values from fiscal years 2022-2024, contending that the rupee would have remained lower than Rs. 278/$ in 2023-24 without IMF conditions.
