Troubled governments that devalue their currencies tend to benefit from the decision, underscoring the tool’s usefulness in the face of crisis, according to the Institute of International Finance, Bloomberg reported. There’s been a pivot toward economic growth in countries just three years after authorities opt for major currency devaluations, economists Robin Brooks and Jonathan Fortun found in an analysis of the 51 largest and most-persistent episodes since 1990.
Pakistan's central bank raised its key interest rate to a record 21% on Tuesday as the cash-strapped country bid to curb crippling food inflation and maintain the confidence of foreign creditors, Reuters reported. The 100 basis-point (bp) increase by the State Bank of Pakistan (SBP) was less than the 200 forecast by a Reuters poll of analysts as the country grapples with record annual consumer inflation of over 35%. Global factors have compounded consumer inflation already buoyed by Pakistan's weakening currency, energy tariff increases and hikes in food prices due to Ramadan.
Pakistan has the habit of intentionally creating controversies in order to divert public attention from its own failures, according to a Financial Express analysis. Just last week, Esther Perez Ruiz, who is IMF’s Resident Representative to Pakistan was forced to speak out and clear the air on Islamabad’s “posturing on several key matters.” She told the media that there is no truth in Pakistan Finance Minister Ishaq Dar’s statement that the IMF has asked Islamabad to compromise on its nuclear programme if it wants funds.