KARACHI: Pakistani rupee maintained its downward trajectory against the US dollar in the inter-bank market for the ninth straight session and depreciated by 78 paisas (-0.28 percent) on Thursday.
The State Bank of Pakistan (SBP) said in a tweet that the rupee opened at 282.65 against the dollar in the interbank market and closed at 283.43. The rupee has appreciated by Rs4.56 during the current fiscal year 2023-24, while it has depreciated by Rs52.01 in the current year. The rupee gained Rs6.26 (+2.23 percent) against the greenback in the month of October.
Similarly, the Pakistani rupee depreciated by 50 paisas against the greenback in the open market. The rupee was quoted in the range of 281.5-284.5 a dollar as compared to 281-284 in the previous session. The rupee has recovered by Rs47.5 against the dollar in the last 42 sessions in the open market.
The recent fluctuation comes after a remarkable 28-day winning streak for the Pakistani currency, which concluded on October 17, 2023. The rupee had fallen to a record low of Rs307.09 a dollar on September 5. But following a crackdown by agencies on illegal foreign exchange trading and structural reforms introduced by the central bank, the rupee had recovered every day in the interbank market since then.
The gap between rates in the interbank and open markets is required to be less than 1.25 percent under one of the structural benchmarks set by the International Monetary Fund (IMF). The IMF mission, led by Nathan Porter, will visit Pakistan on Thursday to discuss the first review of the country’s $3 billion standby arrangement (SBA).
Though the finance ministry is confident about the successful completion of the SBA review, external financing needs may come under sharp focus during the review, as the budgeted $4.5 billion loans from foreign commercial banks and $1.5 billion through issuance of Eurobonds for the current fiscal year have yet to be materialized. A successful review is crucial to pave the way for further inflows into the country, which deals with low foreign exchange reserves.
The IMF review process will be conducted in two phases. Initially, technical talks will be held, which will be followed by policy-level discussions. The country is trying to navigate a tricky path to economic recovery under a caretaker government in the wake of an IMF loan programme, approved in July, that helped avert a sovereign debt default. Under the programme, Pakistan received $1.2 billion from the IMF as the first tranche in July. A successful IMF review will pave the way for a $700 million instalment. – TLTP