Fed rate hike may pressure Pakistan rupee while oil prices remain bigger risk
Market experts warn that the US Federal Reserve's recent interest rate increase could strain the Pakistani rupee, though rising oil costs pose a greater threat to the economy.
Fed decision impacts borrowing costs
The US central bank raised benchmark rates by 25 basis points on Wednesday. This move brings the overnight rate range to between 3.75 percent and 4.00 percent. Analysts note that higher global rates will make future external borrowing more expensive for Pakistan.
Oil prices create larger pressure
Experts state that elevated oil prices remain the primary immediate risk for the nation. High fuel costs directly increase the import bill and worsen the external account balance. The US dollar also hit a seven-week high following the announcement.
Reserves offer some insulation
The State Bank of Pakistan holds record reserves totaling 21.4 billion dollars. A recent Eurobond issuance locks in financing needs for the next period. Limited foreign participation in local debt markets helps shield the economy from shocks.
All 2 outlets report consistently
No differences in figures, names or dates across these reports.
- Business Recorder
- Dawn
Reported by
2 independent outlets. Headlines as published. Links open the original report.