US dollar fends off pressure, scores handsome gain against Pakistani rupee
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The US dollar as usual wasted little time in strike back at the Pakistani rupee after coming under pressure as the business was set into motion at the intrabank market on Thursday, reported 24NewsHD TV channel.
The probable reason for the greenback to feel jittery was the outcome of the Pakistan’s talks with the IMF which apparently were inconclusive but Finance Minister Miftah Ismail was upbeat about the result. However, the greenback as was the practice of the American currency for the last many days of starting the day defensively struck back at the Pakistani rupee.
The dollar which suffered a setback and lost 67 paisas against Pakistani rupee in the first hour struck back and gained 58 paisas. The greenback was currently being traded at Rs202.50, forex dealers said.
The US dollar closed the day at 201.92 on Wednesday.
The International Monetary Fund (IMF) late Wednesday delayed the revival of the stalled $6-billion programme under the External Financing Facility (EFF) for Pakistan.
The revival was expected to bring stability to the financial markets, the fast-weakening Pakistani rupee, and the depleting foreign exchange reserves, as the government had pinned hopes on the programme's resumption.
Pakistan failed to convince the IMF, as both sides could not reach a staff-level agreement despite week-long negotiations in Doha, Qatar, from May 18-25.
The Fund, in a statement, has emphasised the abolition of subsidies on petroleum products and electricity, among other conditions, as a prerequisite for the programme's revival.
Following the conclusion of the talks, IMF Mission Chief for Pakistan, Nathan Porter, said the Fund held constructive discussions with the Pakistani officials, which aimed at reaching an agreement on policies and reforms. “Mission has held highly-constructive discussions with Pakistani authorities aimed at reaching an agreement on policies and reforms that would lead to the conclusion of the pending seventh review of the authorities’ reform programme, which is supported by an IMF Extended Fund Facility arrangement."
Porter said considerable progress was made during the mission, including the need to continue to address high inflation and the elevated fiscal and current account deficits, while ensuring adequate protection for the most vulnerable.
The Fund also appreciated the State Bank of Pakistan's (SBP) decision to hike the policy rate from 12.25% to 13.75% — a move made to control the increasing inflation in the country. But the mission's chief noted that on the fiscal side, there were deviations from the policies agreed upon in the last review, partly reflecting the fuel and power subsidies announced by the authorities in February.
Reporter Ashraf Khan