LAHORE: Renowned tax expert Ashfaq Yousuf Tola said on Monday the value of PKR is 259.6/USD after adjusting the “Current Account Balance” (CAB) of the FY25.
He said the rupee value has been kept artificially undervalued at PKR 283.8/USD, as the present value of PKR would have been 259.6/USD.
Tola said the first scenario provided PKR valuation as of June 30, 2024 and the second scenario illustrated the valuation of PKR based on the actual CAD, i.e. $665 million in FY24. The third scenario provided the PKR value based on the government’s CAD projection of 0.9% of GDP of FY 25; while the last scenario calculates the PKR value based on the adjusted CA projection of the government adjusted for the whole FY25.
A 10-rupee depreciation results in a 2% increase in inflation, and vice versa, he explained.
Tola said stabilisation can be achieved by controlling the CAD, and not by IMF recipe. The higher the CAD is, the higher the PKR value will be, and vice versa. A 10-rupee devaluation results in a 2% increase in inflation.
According to him, the real PKR current value of 233 shall keep low inflation, low interest rate, and more fiscal. Likely scenarios depict the real worth of PKR, focusing on impact of CAD, imports, exports, and remittances, he added.
Tola pointed out that fixing the economy in upcoming FY26 requires a recipe that may contain several ingredients in order to achieve sustainable economic growth. First and foremost, the economic growth should be export-led, unlike the recent past, i.e. FY22 when the economic growth was Import-oriented. As a consequence of the import-led growth in FY 2022, Pakistan spiralled into external and fiscal imbalances. Therefore, Pakistan had the highest inflation and an economic nosedive in FY23.
He recalled these decisions made the cost of living miserable due to elevated inflation. To ensure sustainable growth, he stressed, it is imperative to pursue export-led growth, which has three vectors; (i) the agricultural sector; (i) the manufacturing sector; and (ii) the IT industry. Along with this, said Tola, public financial management has an important role to play. It involves expenditure control and revenue enhancement. Fiscal management has a big role in this course correction. Thereby, the policies should be designed in such a way that leads toward Growth with stability.
Pakistan’s economic outlook reflects cautious optimism, as inflation experienced a hike in June 2025, from 0.3% in April 2025 to 3.2% in June 2025. Moreover, the inflation outlook remains vulnerable to several risks, including additional fiscal measures to address revenue shortfalls, a potential resurgence in food inflation, increment in petroleum levy and rising global commodity prices. Despite these challenges and the anticipated phasing out of the favourable base effect, the Monetary Policy Committee assessed that the current monetary policy stance is appropriate for stabilising inflation within the target range.
Copyright Business Recorder, 2025
