This does not include the impact of fiscal adjustments made under the programme, he added. Pak rupee value against the dollar was Rs 141 on May 13, 2019, the day after Pakistani authorities reached a staff level agreement with the IMF. On 16 May, the newly appointed State Bank of Pakistan Governor Reza Baqir implemented the prior condition and the rupee fell to Rs 147 to the dollar; by 27 June the rupee dollar parity was at 164 though in recent days it has gained value and is at Rs 157 per dollar.
Sources in the finance ministry told this correspondent that inflation is expected to ease in the second half of the current fiscal year however Hafeez Pasha has linked any decline in inflation to exchange rate stability. Pasha added that if the exchange rate remains stable at the existing level, inflationary pressures would ease from November onwards and may decline to single digits by the end of the current fiscal year.
Pasha clarified that while a10 percent rupee depreciation contributes 1.5 percent to annual inflation yet its impact on the monthly consumer price index (CPI) is 0.15 percent and 0.3 percent with a lagged impact during six months. The former finance minister stated that Pakistan's foreign debt quantum and debt servicing cost has declined with an increase in rupee value against the dollar (from Rs 164 to Rs 157) by Rs 700 billion.
He added that inflation would further decline if the international price of oil declines. According to Asian Development Bank's (ADB) Outlook inflation would rise to 12 percent subsequent to a planned increase in domestic utility prices, taxes introduced in the budget, and the lagged impact of currency depreciation.