- Pakistan Rupee (PKR) pares gains from Tuesday
- IMF upwardly revised Pakistan’s GDP to 1.5%
- US Dollar (USD) rises ahead of FOMC
- Fed are not expected to adjust monetary policy
The US Dollar Pakistan Rupee (USD/PKR) exchange rate is on the rise on Wednesday, paring losses from the previous session. The pair settled -0.06% lower on Tuesday at 160.60, towards the lower end of the daily traded range. At 11:15 UTC, USD/PKR trades +0.1% at 160.75.
The International Monetary Fund upwardly revised its growth outlook for Pakistan as part of its World Economic Outlook for 2021. The IMF now sees Pakistan’s economy expanding by 1.5% in the current fiscal year.
The IMF also upgraded its global growth outlook to 5.5% this year followed by 4.2% growth in 2022. The international body highlighted in its report that the rollout of the covid vaccine in addition to high fiscal spending particularly in the US will help global growth power ahead.
However, the IMF also highlighted the uncertainty that still exists due to covid. Mutations of the virus potentially pose a risk to the effectiveness of the covid vaccine and therefore global growth.
The IMF also highlighted the growing divergences between rich counties which have greater access to covid vaccines and poorer countries which will wait longer for the inoculation.
The US Dollar is pushing higher across the board. The US Dollar Index which measures the value of the greenback versus its major peers trades +0.25% at the time of writing at investors look ahead to the FOMC rate announcement later today.
The Federal Reserve is not expected to adjust monetary policy in this meeting, the first meeting under the Joe Biden administration. Near term the risks remain tilted to the downside, as covid cases continue to tick higher and businesses struggle amid lockdown restrictions.
However, the outlook is improving with the prospect of additional fiscal stimulus and a ramped up vaccine programme under Joe Biden.