US dollar crashes by 11 rupees in open market
Local currency edges up by nine paisas against greenback in interbank business
By News Desk
June 1, 2023 10:07 AM
The US dollar crashed by a huge margin against the Pakistani rupee in open market on Thursday after State Bank of Pakistan’s permission for dealers to buy dollars from the interbank market for credit card business, reported 24NewsHD TV channel.
The greenback nosedived by 11 rupees as it was now being traded at Rs300 down from Rs311.
Exchange Companies Associatio General Secretary Zafar Piracha predicted that the US dollar will lose more value in the open market in the days to come. “Improvement in supply will also take the US dollar down in the open market,” he added.
Meanwhile, as uncertainty about the IMF loan programme continued to grip the money market, the Pakistani rupee edged up against the US dollar in the interbank business on Thursday.
According to the State Bank of Pakistan, the local currency was appreciated by nine paisas against the greenback and ended the day at Rs285.38.
On Wednesday, the Pakistani rupee had sustained marginal losses against the US dollar, depreciating by 0.04% in the interbank market. At close, the currency settled at 285.47, a decline of 12 paisas.
In a key development, Minister of State for Finance Ayesha Ghous Pasha had said that the IMF does not have the mandate to interfere in the internal affairs of Pakistan.
According to a Reuters report, IMF mission chief for Pakistan Nathan Porter said on Tuesday that the IMF remained in touch with the government in Pakistan in order to pave the way for a board meeting before a financing programme expires at the end of June.
Porter said that broadly speaking, "overcoming the present economic and financial challenges would require sustained policy efforts and reforms for Pakistan to regain strong and inclusive private-led growth."
While the IMF does not comment on domestic politics, the IMF official said it hopes "a peaceful way forward is found in line with the Constitution and the rule of law," referring to Pakistan's political instability.
Talking to newsmen in Islamabad on Wednesday, Ayesha Pasha said that the IMF programme is ending on June 30, adding that no discussion had been held regarding extension of the current programme.
Pakistan had signed the current 36-month $6 billion Extended Fund Facility in July 2019. The IMF, however, extended the programme by nine months to June 30, 2023 and its size was also increased to $6.5 billion.
Over the past almost four years, the programme has been derailed at least four times, including on two occasions during the tenure of the current coalition government.
The coalition government has failed in timely completing the programme reviews and $2.6 billion still remains undisbursed because of disagreement on the ninth review, which also delayed the completion of 10th and 11th reviews.
Pakistan has implemented almost all prior actions as demanded by the IMF but still the global lender is delaying the staff-level agreement for the ninth review.
The staff-level agreement has been delayed since November, with more than 100 days gone since the last staff-level mission to Pakistan, the longest such delay since at least 2008.
“If the deal with the IMF is not reached, the Ministry of Finance is not sitting with its eyes closed. Plan B is always there. However, our priority is the IMF programme,” the state minister said resolutely.
Ms Pasha said that the delay in the loan programme is not in the interest of both Pakistan and the IMF.
Prime Minister Shehbaz Sharif has assured the managing director of the IMF that Pakistan would implement all the conditions of the IMF and complete the programme, she added.
The minister of state for finance hoped that the staff level agreement would be reached with the IMF before the new budget which would be presented on June 9.
Reporter Ashraf Khan