KARACHI
The Pakistani rupee depreciated against the US dollar by 7 paisas (-0.02 percent) in the interbank market on Monday.
The State Bank of Pakistan (SBP) said in a tweet that the rupee opened at 287.19 against the dollar in the interbank market and closed at 287.26. During the current fiscal year 2022-23, Pakistani rupee has lost Rs81.37 against the US dollar in the interbank market, while it plummeted by Rs60.93 against the greenback in the current year.
However, the local unit appreciated by Re1 (+0.34 percent) against the greenback in the open market. The rupee was quoted in the range of Rs293-296 against the US dollar in the open-market as compared to a range of Rs294-297 a session earlier.
According to currency experts, stabilisation in exchange rate hinges on the revival of the International Monetary Fund (IMF) loan programme.
According to them, 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.
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 victims of geopolitics.” 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.
In a related development, the central bank’s foreign exchange reserves increased by $107 million last week, reaching $4.01 billion.
