Apropos 'IMF for more flexible exchange-rate regime', carried by Business Recorder yesterday, it is heartening to note that the International Monetary Fund (IMF) has made a profound observation with regard to country's existing exchange-rate regime. According to the newspaper, International Monetary Fund has expressed concern about recent appreciation of normal exchange rate and stressed a more flexible exchange which will help State Bank of Pakistan (SBP) to better reach its reserves objectives and boost competitiveness.
Students of economics and finance are well aware of the fact that an exchange-rate regime is the way a government manages its currency in relation to other currencies and the foreign exchange market. It is closely related to monetary policy and the two are generally dependent on many of the same factors.
According to reports, the central bank is scheduled to announce on Saturday its Monetary Policy Statement (MPS) for the next two months. It is, however, not known whether it will make a comment or present an analysis of the situation in relation to the country's current exchange-rate regime.
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