Economists advocate long-term, economy-first policy

Several economists quoted by The Express Tribune want policymaking to move away from short-term, security-focused management and toward a longer horizon centred on the economy. Their call follows a period of rupee stability, with the currency at Rs277.50 per dollar through July 2026 inside a tight 277 to 284 band. The rupee gained 1.8 per cent in calendar 2024 and was almost flat in 2025, though it remains far weaker than its end-2017 level of about Rs109.

Nasheed Malik of Growth Securities dates the turn to a period when default fears were open and official reserves were thin. He said State Bank reserves fell below $4 billion at one stage and import cover dropped to one month. The rupee averaged about Rs297 in September 2023 and touched 320 intraday, before easing back to 278.

Mohammed Awais Ashraf of AKD Securities contends that the higher REER stems from domestic inflation outpacing that of trading partners, not from an imminent break in the managed band. The index climbed to 107.9 in July from 106.3 in June, an eight-year high. Net FDI, by contrast, declined 34% during FY26, reaching roughly $1.64 billion, while Ahsan Mehanti of Arif Habib Commodities estimated the currency's overvaluation near 7.9%.