KARACHI
\nPakistani rupee slipped against the US dollar for the second straight week amid stable and uncertain sessions and fell by 0.19 percent on a week-on-week basis.
\nAccording to the figures shared by the central bank, the dollar opened at Rs285.08 in the interbank market on Monday and closed at Rs285.62 on Friday. During the preceding week, the local unit depreciated by 0.53 percent against the greenback in the interbank market.
\nDuring the current fiscal year 2022-23, Pakistani rupee has lost Rs79.95 against the US dollar in the interbank, while it plummeted by Rs59.39 against the greenback in the current year.
\nThe local currency demonstrated a mix of stability and volatility against the US dollar throughout the week. The currency experts attributed these fluctuations to political tensions, import demands, and the delay in revival of the IMF programme.
\nAccording to a report by Bloomberg, the rupee is likely to rebound to 244 per US dollar after October 2023 if the political turbulence passes as elections would help restore order. However, the currency will likely fall further if Chairman PTI Imran Khan and the government continue to clash and\/or if the IMF chooses not to provide loans, the report warned.
\n\u201cPakistan\u2019s rupee is undervalued by about 14 percent, according to our model,\u201d Ankur Shukla, South Asia Economist for Bloomberg Economics said on Friday. He attributed the depreciation to the delays in aid from the International Monetary Fund and clashes between the government and opposition leader Imran Khan.
\nAccording to the estimations put forth by Bloomberg Economics, the fair value of PKR is around 244. This fair value measures the change in the real effective exchange rate required to bring the current account deficit in line with long-term trends.
\nCurrency 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.
\nPakistan\u2019s 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.
\nThis implies a constant precarious position of the foreign exchange reserves despite tight import curbs.
\nPakistan\u2019s 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.
\nInternationally, the US dollar firmed to near a six-month peak last week on the back of rising US Treasury yields, as optimism over debt ceiling talks in Washington raised expectations of higher-for-longer interest rates. President Joe Biden and top US congressional Republican Kevin McCarthy earlier this week underscored their determination to strike a deal soon to raise the government\u2019s $31.4 trillion debt ceiling, with hopes of finalising a deal after Biden returns from the Group of Seven meeting in Japan on Sunday.<\/p>\n","protected":false},"excerpt":{"rendered":"
KARACHI Pakistani rupee slipped against the US dollar for the second straight week amid stable and uncertain sessions and fell by 0.19 percent on a week-on-week basis. According to the figures shared by the central bank, the dollar opened at Rs285.08 in the interbank market on Monday and closed at Rs285.62 on Friday. During the […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[],"class_list":{"0":"post-332706","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-business"},"yoast_head":"\n