KARACHI
Pakistani rupee weakened by 12 paisas (0.04 percent) against the US dollar on Wednesday due to economic and political instability in the country.
The State Bank of Pakistan said in a tweet that the dollar opened at Rs285.35 in the interbank market and closed at Rs285.47. In the open market, the dollar was traded at 314 a dollar against Rs315 per dollar a session earlier. Market talks suggest that the widening difference between interbank and open market rates is due to the prevailing economic uncertainty.
During the current fiscal year 2022-23, Pakistani rupee has lost Rs79.6 against the US dollar in the interbank, while it plummeted by Rs59.04 against the greenback in the current year.
Currency analysts attribute this depreciation to the heightened demand for the US dollar in relation to import and other corporate payments. Additionally, 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.
On the other hand, the State Bank of Pakistan’s foreign exchange reserves experienced a decline of $119 million on a week-on-week basis, reaching $4.19 billion.
