Pakistani rupee again crushes US dollar by big margin

Emboldened rupee drags greenback to Rs199 level after govt hiked petroleum prices

By: News Desk
Published: 10:59 AM, 30 May, 2022
Pakistani rupee again crushes US dollar by big margin
Caption: File photo.
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The Pakistani rupee so far has managed to break the upward streak of the US dollar by pulling it down after a hike in the POL prices and an increase in the policy rate by the State Bank of Pakistan, reported 24NewsHD TV channel.

According to the forex dealers, the US currency during morning session in the interbank trading on Monday saw a considerable slide as its value was depreciated by 70 paisas, though it first lost Rs1.76 but later recovered some of the lost ground. The greenback ended the dat at at Rs199.06. 

In the open market, the US dollar also plummeted by Rs1.60 and also came down below Rs200 mark. It ended the day at Rs199.60 in the open market.

On the last working day on Friday, the emboldened Pakistani rupee rocketed past the US dollar by Rs2.25 and closed at Rs199.76.

Rupee which has been struggling against the US dollar for the last three weeks gained strength when the government in order to get revived its loan programme with the IMF started implementing its directives and heavily increased the prices of petroleum products on Thursday night. The government announced a whooping increase of Rs30 per lire in the prices of petroleum products. 

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 Fund, in a statement, emphasised the abolition of subsidies on petroleum products and electricity, among other conditions, as a prerequisite for the programme's revival.

But later, 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."

During a press conference on Saturday, Finance Minister Miftah Ismail said the hiking prices of petroleum products strengthened rupee and gave boost to the stock market. 

Miftah explained had the government not risen the POL prices, then the economy would have come under pressure and inflation would have rebounded.

He said that the Fund, which had to provide $3 billion, was requested to extend the programme by one year and provide additional $2 billion, adding accordingly the country expected around $5 billion from the fund.

He further divulged the staff-level agreement with the IMF would be signed next month (June).

Miftah said that the programme with the Fund was not important just because the country gets money from the fund rather, it is important because it opens ways for getting funds from other multilateral organizations like Word Bank and Asian Development Bank.

He said, once unlocked by IMF, Pakistan would get money from multilateral organizations adding that around $8.9 billion were already in pipeline from the World Bank.

Reporter Habib Khan