Despite all the signs predicting a further erosion in the value of the rupee, it keeps getting stronger. The main reason given by the government is that remittances have increased, and imports have fallen. Both factors do not hold water. Why would remittances increase in these times, when almost all countries are sacking foreign workers? I've heard that besides reducing the number of Pakistanis working in the Middle East, those who have not been sacked are getting reduced salaries. How would such people be able to save anything to remit to Pakistan?
As far as imports are concerned, only crude oil imports have gone down. Almost everything else is imported, including foodstuffs. Moreover, China has suddenly increased freight charges to three times what they were in the past. And since most of our imports come from China, we should see a demand for the dollar, thus weakening the rupee.
I'm beginning to wonder if this isn't a ploy by the government so that it can buy all the dollars in foreign currency accounts at a cheap price. I remember Nawaz Sharif doing this, paying Rs. 46 to the dollar. He and his friends also managed to siphon away half a billion dollars that day, when Pakistan went nuclear. With the inept and incompetent PTI government threatened by a collapsing economy, Imran Khan might do it as well. Of course, the rupee would then go into free fall, perhaps touching Rs. 200 to the dollar.
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