American multinational financial services company Goldman Sachs Group Inc. has warned that the Pakistani Rupee’s (PKR) recovery is likely short-lived, Bloomberg reported on Thursday.
Goldman analysts led by Kamakshya Trivedi wrote, “The recent appreciation of the Pakistani rupee will likely be short-lived, given soaring interest costs and only short-term arrangements with the International Monetary Fund and bilateral financing to support the external balance. The market will continue to require a premium for Pakistan’s rupee ahead of elections”.
Notably, the PKR has surged by roughly 9 percent since late August, making it the best-performing currency in the world after Afghanistan’s Afghani (AFN). The interim government’s crackdown on black market trade, among other factors, helped with the local unit’s performance during the period in review.
In the short term, investors see turmoil as the country prepares for national elections next year. Meanwhile, inflows from exports and remittances are down, making the country heavily reliant on aid from Middle Eastern countries and China.
Source: Pro Pakistani