Monday 12, May 2008 by Mike Gallagher

Investors take long view on Pakistan economic turmoil

Reports have emerged that some investors are pulling out of Pakistan as a depreciating rupee caused by a weakening dollar and political uncertainty is blunting investor appetite. The rupee has dived by nearly 9 per cent since the start of the year to a little under 70 rupees to the dollar. The Pakistani currency has fell by two rupees in just one day’s trading last week amid concerns over rising inflation, which is at a 13 year high and falling foreign investment. Pakistan’s low foreign exchange reserves means that the central bank could struggle to keep the rupee above the 70 to a dollar mark.

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