KARACHI: Pakistani rupee snapped its five-day losing streak against the US dollar in the interbank trade and remained largely stable on Wednesday, appreciating by 0.01 percent. The State Bank of Pakistan said in a tweet that the dollar opened at Rs287.15 in the interbank market and closed at Rs287.13, with a minor gain of two paisas. During the preceding five sessions in the interbank trade, the rupee depreciated by Rs2.19 against the greenback. TLTP
In the open market, the rupee was traded at 308-310 a dollar against 305-307 per dollar a session earlier.
Factors such as the persistent delays in the revival of the International Monetary Fund (IMF) loan programme, a continuous drop in foreign exchange reserves, increasing chances of default on foreign debt repayment, and political instability in the country are contributing to the mounting pressure on the rupee against the US dollar.
During the current fiscal year 2022-23, Pakistani rupee has lost Rs81.26 against the US dollar in the interbank, while it plummeted by Rs60.70 against the greenback in the current year.
The rising dollar price gap in open market and interbank has created fear among the stakeholders that the exchange rate could face another shock and the local currency would fall to Rs300 in the interbank in the coming days. The financial circle believes that the banks are under pressure from the federal government to open letters of credit for imports without taking the SBP into confidence.
The central bank has been trying to minimise imports, reduce the current account deficit and avoid a default-like situation. However, the political government is under intense pressure from the manufacturing and export sectors to allow imports or face a negative economic growth rate.
Moreover, the demand for dollars and Saudi riyal is high in the market due to the Hajj season as Hajj flights have been started. Concerns surrounding the ongoing International Monetary Fund (IMF) programme have brought the local currency under pressure. Experts say resumption of the IMF programme, which remains stalled since last year, is crucial for the debt-ridden economy.
Globally, the US dollar held near a two-month high on Wednesday on safe-harbour demand as negotiations over raising the US debt ceiling dragged on with no imminent resolution in sight.
