Rupee nears 300 against dollar with Rs8.71 increase

KARACHI: Pakistani rupee continued melting against the US dollar amid deteriorating law and order in the country due to political turmoil and depreciated by Rs8.71 paisas (-3 percent) on Thursday.
Overall, the local currency has shed around 5 percent against the US dollar during the last two days. The country has been suffering from law and order situation since the arrest of former prime minister Imran Khan on Tuesday.
The State Bank of Pakistan said in a statement that the dollar opened at Rs290.22 in the interbank market and closed at Rs298.93. Within the open market, the rupee was traded at 304/299 per dollar against 289/292 a dollar a session earlier.
During the current fiscal year 2022-23, Pakistani rupee has lost Rs93.06 against the US dollar in the interbank, while it plummeted by Rs72.50 against the greenback in the current year.
Pakistan has been facing a shortage in its foreign exchange reserves for quite some time, which is affecting the overall exchange rate, and business and economic activity in the country. Moody’s Investor Service has warned that Pakistan could default without an International Monetary Fund bailout as its financing options beyond June are uncertain. “We consider that Pakistan will meet its external payments for the remainder of this fiscal year ending in June,” according to Moody’s.
The uncertainty over the ninth review of Pakistan’s economy by the IMF under its loan programme has resulted in the rupee sliding. The Washington-based lender has yet to approve the release of the crucial instalment of $1.1 billion, originally due to be disbursed in November last year as part of a $6 billion bailout secured in 2019.
Separately, the SBP reported that workers’ remittances for the month of April 2023 were recorded at $2.21 billion against $2.53 billion in March. Overall inflows for the first ten months of the current fiscal year clocked in at Rs22.74 billion, plummeting by 13 percent on a year-on-year basis.
In a related development, the Finance Division informed that the government has arranged the rollover/repayment of $3.7 billion debt, which was supposed to be repaid by the end of June 2023. – TLT