PKR: Stability Reigns, But Depreciation Ahead

The rupee should remain broadly stable now that Pakistan's official stock of foreign reserves has returned to pre-crisis levels. However, we are maintaining a slight depreciatory bias on our belief that global sentiment will start to dull and the country's much improved external position could begin to look increasingly wobbly again next year. With this in mind, we are pencilling in targets of PKR85.00/US$ and PKR88.50/US$ for end-2009 and end-2010, respectively.

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