The Pakistani rupee\u2019s value declined sharply in the interbank market on Wednesday, with the local currency trading at Rs265 per dollar around 1pm, according to data shared by the Exchange Companies Association of Pakistan (Ecap).<\/p>\n
This equates to a depreciation of 1.72 per cent from yesterday\u2019s close of Rs261.5 a dollar.<\/p>\n
Ecap Secretary General Zafar Paracha attributed the rupee\u2019s depreciation to the delay in the agreement with the International Monetary Fund (IMF) for an economic bailout.<\/p>\n
\u201cThe rupee and the economy are both under pressure again and the main reason is the delay and new conditions by the IMF.\u201d<\/p>\n
Director of financial data and analytics portal, Mettis Global, Saad bin Naseer also shared the same view.<\/p>\n
\u201cThe market was calm in February and [the rupee] appreciated 2.7pc. There was anticipation that an IMF deal would be in soon. However, due to the delay in the IMF agreement and a higher open market rate in Afghanistan \u2014 Rs285-290 a dollar \u2014 the rupee\u2019s value is declining.\u201d<\/p>\n
He said the government should take strict action against those involved in illegal buying and selling of dollars and fulfil the IMF\u2019s conditions as soon as possible to avoid further panic.<\/p>\n
\u201cOnce the deal is through, you will see the USD fall below the Rs260 level,\u201d he added.<\/p>\n
Tresmark\u2019s Head of Strategy Komal Mansoor said there were a number of factors behind the rupee\u2019s depreciation, the most important of which was that negotiations with the IMF have so far not led to a staff-level agreement.<\/p>\n
Because of recent rule changes by the State Bank of Pakistan (SBP), exporters were no longer being incentivised to bring proceeds back into the country, which resulted in lower inflows and the rupee falling, she said.<\/p>\n
Mansoor added that there were reports the IMF had asked the central bank to reverse the leeway it gave to exporters for realisation of proceeds, which had caused panic in the market. \u201cIt does not reflect stability in the policy. If the policies are being dictated by the IMF \u2026 of course, there will be panic in the market.\u201d<\/p>\n
Another factor that negatively affected the rupee\u2019s value was the prevailing political unrest, she said.<\/p>\n
Pakistan is in the midst of a severe economic crisis, with its reserves depleting to just over $3 billion, enough to cover only three weeks of imports. In such a situation, the country urgently needs to sign a deal with the IMF that would not only release $1.2bn but also unlock funding from friendly countries and other multilateral lenders.<\/p>\n
A well-placed source had earlier told Dawn that Pakistan and IMF will sign the staff-level agreement on Feb 28. However, background discussions with officials reveal the government is finding it increasingly difficult to convince the Fund to release a loan installment.<\/p>\n
The IMF has changed interpretations of at least four prior actions ahead of rea\u00adching a staff-level agreement on the direly needed economic bailout.<\/p>\n","protected":false},"excerpt":{"rendered":"
The Pakistani rupee\u2019s value declined sharply in the interbank market on Wednesday, with the local currency trading at Rs265 per dollar around 1pm, according to data shared by the Exchange Companies Association of Pakistan (Ecap). This equates to a depreciation of 1.72 per cent from yesterday\u2019s close of Rs261.5 a dollar. Ecap Secretary General Zafar […]<\/p>\n","protected":false},"author":2,"featured_media":316794,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[],"class_list":{"0":"post-316793","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-business"},"yoast_head":"\n