Pakistan, May 31 -- Tola Associates' latest economic report reveals that the Pakistani rupee (PKR) is artificially undervalued. The fair value of the rupee, after analyzing the current account balance from July to April of FY25, is estimated at 249.2 PKR per US dollar. However, the rupee is currently trading at around 282.2 PKR/USD in the inter-bank market, signaling a gap between actual and fair value.

The report outlines four possible valuation scenarios for the rupee based on different current account deficit (CAD) figures, including last year's actual deficit of $665 million and the government's projections. It also warns that every 10-rupee drop in the rupee's value causes inflation to rise by 2%, making currency stability crucial f...