Rupee edges lower against dollar for third week


Pakistani rupee fell for the third consecutive week against the US dollar in the interbank market, depreciating by 0.09 percent on a week-on-week basis.
According to the figures shared by the central bank, the rupee opened at 286.93 in the interbank market on Monday and closed at 287.19 on Friday, going down by 26 paisas against the greenback. During the preceding weeks, the local unit depreciated by 0.44 percent and 0.19 percent against the greenback in the interbank market.
During the current fiscal year 2022-23, Pakistani rupee has lost Rs81.30 against the US dollar in the interbank, while it plummeted by Rs60.86 against the greenback in the current year.
However, the rupee remained on an upward trajectory against the US dollar in the open market. The rupee was quoted in the range of Rs294-297 in the open-market against the greenback as compared to a range of Rs302-305 a week earlier, showing an improvement of Rs8 (2.62 percent).
According to currency experts, stabilisation in exchange rate hinges on the revival of the International Monetary Fund (IMF) loan programme. However, Finance Minister Ishaq Dar said on Thursday that global institutions want Pakistan to default like Sri Lanka and then enter negotiations.
In an apparent reference to the delay in funding from the IMF, he stated, “Pakistan’s time is being wasted. We are a victim of geopolitics. The IMF has never dealt this way in the past 30 years.” However, he added that “Pakistan will receive good news by June 30.”
However, the Ministry of Finance clarified on Friday that the government is fully committed to the IMF programme and is keen to at least complete the 9th Review, saying the coalition government has already taken many difficult and politically costly decisions in this context. “We are not “doctrinaire” about any element of the Budget FY24 and are keenly engaged with the IMF to reach an amicable solution,” said the ministry, adding the negotiations with IMF are ongoing.
IMF’s Resident Representative for Pakistan Esther Perez Ruiz said on Thursday that Pakistan’s budget for the financial year 2023-24 has missed an opportunity to broaden the tax base in a more progressive way. Esther said that the IMF team stands ready to work with the government in refining this budget ahead of its passage.
The local currency demonstrated a mix of stability and volatility against the US dollar throughout the week. The currency experts attributed these fluctuations to political tensions, import demands, and the delay in revival of the International Monetary Fund (IMF) loan programme. On a positive note, the central bank’s foreign exchange reserves increased by $107 million, reaching $4.01 billion.
According to currency experts, large debt payments to the tune of $3-4 billion will be made in the coming days, which will keep the rupee under stress. They added the market is also watching developments on the IMF front. They identified several factors contributing to the rupee’s depreciation including high import and corporate payments and dwindling foreign exchange reserves.