Pakistani rupee resists US dollar s comeback bid
March 7, 2023 11:07 PM
The Pakistani rupee showed some spine on Tuesday also as it scored a healthy gain against the US dollar in the interbank market but could not sustain it towards the end of the day, reported 24NewsHD TV channel.
According to the State Bank of Pakistan, the local currency started the day on solid footing and went up by Rs2.92 and at one time was traded at at Rs275. However, at the end of the day the dollar was able to recover almost the total loss except five paisas and ended the day at Rs277.87
On Monday, the Pakistani rupee had maintained its positive momentum against the US dollar and appreciated 0.19%. As per the State Bank of Pakistan (SBP), the rupee settled at 277.92 against the greenback, an increase of 54 paisas in the interbank market. During the day, the rupee was up 1.26% before losing some steam towards the end.
During the previous week, the rupee had plummeted 6.63% against the US dollar, settling at 278.46 in the interbank market after a massive fall on Thursday saw the currency hit yet another record low before making a partial recovery on Friday.
Reports that suggested an International Monetary Fund (IMF) bailout programme was still not on track made the markets jittery. Additionally, heavy import payments and a widening gap between the open and interbank markets again suggested artificial control on part of the authorities.
In a key development on Monday, IMF’s Resident Representative Esther Ruiz Perez said Pakistan will be required to give an assurance that its balance of payments deficit is fully financed for the remaining period of an IMF programme.
The external financing is one of the last in a string of prior actions the lender wants Islamabad to complete before it clears funding stalled since late last year, Esther Perez Ruiz told Reuters in an e-mailed response.
Pakistan hopes to sign a staff level agreement with the IMF after over a month of negotiations to settle policy framework issues aimed at curtailing the fiscal deficit ahead of the annual budget around June.
Pakistan has completed almost all of the prior actions except for the external financing requirement the IMF wanted it to for clearing $1.1 billion in disbursements under the $6.5 billion Extended Fund Facility agreed in 2019. The programme ends in June.
"All IMF programme reviews require firm and credible assurances that there is sufficient financing to ensure that the borrowing member's balance of payments is fully financed ... over the remainder of the programme. Pakistan is no exception," IMF's Ruiz said.
Reporter Ashraf Khan