The Pakistani rupee’s depreciation continued on Thursday as the currency plunged to 187.25 rupees with a fall of 1.33 rupees against the US dollar in the interbank market at the start of trading.
The downward trajectory of the rupee persists with the uncertainty about the resumption of the International Monetary Fund (IMF) loan program for which the government has embarked on crucial talks with the IMF.
Latest trends of the Rupee
- On Wednesday, the value of the dollar rose by Rs1.30 against the rupee, which had closed at Rs185.92 in the interbank to reach Rs187.22
- In the open market, the dollar was traded at Rs187.50
- The currency has depreciated by Rs5.42 since Monday.
“The demand for dollar is increasing due to import payments, especially to buy oil from the international market, which is putting the rupee under pressure,” Samiullah Tariq, director of research at Pakistan Kuwait Investment Company said while talking to a news agency.
“The market sentiment will improve after successful talks with the IMF and after receiving inflows from China since Beijing has agreed to roll over $2.3 billion [of Pakistan’s debt],” he continued.
Currency dealer Zafar Paracha said that the rupee may continue to come under pressure due to the demand for the dollar and the external payments that need to be made.
“It is hoped the government will succeed in securing economic aid from the International Monetary Fund (IMF) and Saudi Arabia, which will help strengthen the rupee,” said Malik Bostan, the chairman of the forex association.
New government in talks with IMF
On April 21, the newly appointed Finance Minister Miftah Ismail left for Washington where he is expected to call on the IMF officials for the revival of a loan facility that was held up following the premature end of the Imran Khan government in the start of the month.
IMF wanted Pakistan to reverse the relief package and subsidies extended by the previous PTI government to revive its Extended Fund Facility (EFF). The IMF wants fuel prices increased to breakeven and taxes restored, amnesty scheme discontinued for industries, circular debt reduced, power rates raised, the minister said.