Bleak economic indicators taking heavy toll on Pakistani rupee
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The bleak economic indicators are not letting the feeble rupee to take a break from its constant slumping against the US dollar as the local unit again registered a decline of 25 paisas in its value during the interbank trading on Tuesday, reported 24NewsHD TV channel.
The currency dealers informed that the US dollar kept up its upward trajectory during today’s trading activity and was settled at Rs230.40, up by 25 notches, towards the close.
Yesterday, the USD gained 48 paisas in its value and ended the day at Rs230.15.
The Monetary Policy Committee (MPC) of the State Bank of Pakistan (SBP) in its meeting on Monday announced to raise the policy rate by 100 basis points (bps) to 17% to arrest the inflationary pressure.
Talking about the exchange rate, SBP Governor Jameel Ahmad said that it was market-based and fluctuations happened within market parameters. Besides this, there was also an element of speculation, Ahmad said. “Our external financing requirements are high and there is a gap between inflows and outflows. Speculators try to encash that difference, because of which the rate is higher in the curb market.
“When our IMF review is completed and inflows are received, market sentiment will improve and the gap in different rates [being offered in the interbank and open markets] will end. This is a temporary phenomenon,” he stressed.
In response to another question, he revealed that certain banks had accrued profits of Rs100bn from January to September 2022 through speculation about the exchange rate.
There is a delay from the government side to comply with IMF’s condition to resume stalled talks with funds which has left Pakistan unable to secure dollar inflows.
On the other hand, in a bid to support businesses, the SBP on Monday allowed one-time facilitation to importers who could arrange funds to settle pending import payments.
Through a circular, the central bank advised banks to provide a one-time facilitation to all those importers who could either extend their payment terms to 180 days (or beyond) or arrange funds from abroad to settle their pending import payments.
Reporter Ashraf Khan