Rupee wins little relief against US dollar
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The US dollar which had been pulverizing the Pakistani rupee for the last few weeks has given some breathing space to Pakistani rupee which has gained 57 paisa in the interbank trading, reported 24NewsHD TV channel.
According to the foreign exchange dealers, the morning trade session was opened with the usual upward trajectory being shown by the US currency for the last several days. The dollar was traded for Rs240 in the interbank, up by 6 paisa by 11am today. But towards the close of the trading session at 4pm, the rupee showed robustness and appreciated by 57 paisa fixing dollar exchange rate at Rs239.37 in the interbank.
The political uncertainty currently prevalent in the country coupled with the ambiguity regarding the release of IMF tranche is badly hurting economy sending wrong signals to the market where rupee is fast losing its foothold and its freefall is continued unabated.
The economic experts are calling upon the government to take measures to stop the shameful slump of rupee.
According to the Mettis Global, there is panic in the market, which will remain unless the State Bank of Pakistan (SBP) intervenes.
The global ratings agency S&P on Thursday revised Pakistan's outlook to “negative” from “stable”, citing risks from higher commodity prices and the country's weakening currency.
The rating agency said that Pakistan's external position is weakening owing to higher commodity prices, tighter global financial conditions, and a weakening of rupee. External resources are likely to remain under pressure even after expected disbursements from the IMF under the restored Extended Fund Facility (EFF) programme.
It further said that it could lower its ratings if Pakistan's external indicators continue to deteriorate.
However, the outlook could be revised to stable if Pakistan's external position stabilizes and improves from current levels, it added.
The report underlined that evidence of improvement could include a sustained rise in foreign exchange reserves.
On the other hand, the Ministry of Finance on Thursday warned that prevailing political unrest was causing governance problems and intensifying the market uncertainties already caused by low foreign exchange reserves and external pressures.
“Inflationary and external sector risks are building macroeconomic imbalances in the economy. Furthermore, the ongoing political unrest is increasing economic uncertainty, which is causing the rupee to depreciate and has an impact on the cost of production. All these factors are making the economic outlook uncertain”, said the Economic Adviser’s Wing (EAW) of the Ministry of Finance in its Monthly Economic Update and Outlook for July.
The ministry said that there was an intense need for the successful completion of the IMF 7th and 8th reviews of Pakistan’s Extended Fund Facility (EFF).