Economics
What Next for Pakistan After a Second Currency Devaluation?
- A rate hike, amnesty scheme expected before elections
- Political fallout expected if Islamabad goes to the IMF again
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Pakistan has allowed the rupee to weaken twice in a space of four months as it attempts to mend its deteriorating finances before elections due in July.
But loosening the grip on managed-float operated currency hasn’t prevented the country’s current and trade deficits from widening, while dollar reserves have slumped to the lowest in almost three years, narrowing the options for policy makers.