KARACHI: State Bank of Pakistan (SBP) on Friday said that exchange rate has been determined by market forces on the basis of demand and supply.
In a tweet message the central bank said that exchange rate is determined by market forces of demand and supply and is a reflection of existing BOP position. Forward exchange rates are determined by the existing spot rates and #Interest rate differentials of the relevant period i.e. time value of money.
“Forward exchange rates (ER) are not a forecast of future exchange rates.”
IMF Report on Pakistan includes ER assumptions which are not predictions. Under the IMF-supported program there is no agreed target level for exchange rate. The exchange rate is market determined, the SBP said.
The IMF had earlier tweeted about the inclusion of exchange rate assumption in its published Staff Report on #Pakistan.