KARACHI: Pakistani rupee registered the second consecutive weekly loss against the US dollar in the interbank market, depreciating by 0.44 percent on a week-on-week basis.
According to the figures shared by the central bank, the dollar opened at Rs285.68 in the interbank market on Monday and closed at Rs286.93 on Friday, going down by Rs1.25 against the greenback. During the preceding week, the local unit depreciated by 0.19 percent against the greenback in the interbank market.
During the current fiscal year 2022-23, Pakistani rupee has lost Rs81.06 against the US dollar in the interbank, while it has plummeted by Rs60.50 against the greenback in the current year.
Similarly, the rupee remained on a downward trajectory against the US dollar in the open market. The rupee was quoted in the range of Rs302-305 in the open-market against the greenback as compared to a range of Rs299-302 a week earlier, showing a decline of Rs3 (1 percent). The local currency demonstrated a mix of stability and volatility against the US dollar throughout the week. The currency experts attributed these fluctuations to political tensions, import demands, and the delay in revival of the International Monetary Fund (IMF) loan programme.
Finance Minister Ishaq Dar said last week that the newly elected government after the next general election should negotiate a fresh deal with the International Monetary Fund (IMF). His remarks came during the question-and-answer session following the unveiling of the Economic Survey 2022-23.
“We are hopeful the ninth review is completed successfully, as it is necessary for Pakistan. After this, it will be only fair that it be the prerogative of a new government, after elections, to negotiate any new programme with the IMF. “At this stage, it would be totally undemocratic and unfair to initiate negotiations on a new programme. Let whoever (wins the election) be the one to decide. They shouldn’t be bound,” said Dar.
In a related development, foreign exchange reserves held by the State Bank of Pakistan (SBP) decreased by $179 million on a week-on-week basis, clocking in at nearly $3.91 billion as of June 2, the SBP data showed. Total liquid foreign reserves held by the country stood at $9.33 billion. Net foreign reserves held by commercial banks clocked in at $5.42 billion.
According to currency experts, large debt payments to the tune of $3-4 billion will be made in the coming days, which will keep the rupee under stress. They added the market is also watching developments on the IMF front. They identified several factors contributing to the rupee’s depreciation including high import and corporate payments and dwindling foreign exchange reserves.
The continuous reduction in foreign exchange reserves is primarily due to the country’s ongoing external debt repayment obligations, highlighting the challenges Pakistan faces in maintaining a favorable balance of payments. Moreover, the rupee has faced significant pressure due to limited inflows and a challenging political climate. – TLTP