Rupee falls for 4th session to Rs286.56 versus dollar

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KARACHI
Pakistani rupee struggled against the US dollar in the interbank trade for the fourth straight session amid persistent delay in revival of the IMF loan programme and Hajj season, and depreciated by 74 paisas (-0.26 percent) on Monday.
The State Bank of Pakistan said in a tweet that the dollar opened at Rs285.82 in the interbank market and closed at Rs286.56. In the open market, the rupee was traded at 292/297 against 291/296 per dollar a session earlier.
During the current fiscal year 2022-23, Pakistani rupee has lost Rs80.69 against the US dollar in the interbank, while it plummeted by Rs60.13 against the greenback in the current year.
According to market experts, the demand for dollars and Saudi riyals is high in the market due to Hajj season as Hajj flights started a day earlier.
They said that concerns surrounding the ongoing International Monetary Fund (IMF) programme added pressure to the local currency. Experts say resumption of the IMF programme, which remains stalled since last year, is crucial for the debt-ridden economy.
Pakistan’s external financing pipeline appeared drying up without the IMF umbrella, as it received $8.1 billion in the first 10 months (July-April) of the current fiscal year 2022-23 against over $13 billion in the same period last year, showing a decrease of 38 percent. This implies a constant precarious position of the foreign exchange reserves despite tight import curbs.
Additionally, the government has asked banks to facilitate export-oriented sectors to open LCs for raw material to restore the industry’s supply line. The analysts attributed rupee’s depreciation to the heightened demand for the US dollar in relation to import and other corporate payments.
Pakistan’s foreign exchange reserves with its central bank decreased by $72 million to $4.312 billion at the end of last week due to external debt repayment. The total liquid foreign exchange reserves held by the country stood at $9.938 billion as of May 12, 2023, compared to $9.99 billion on May 5, 2023, depicting a decline of $53 million.