Rupee snaps three-week losing streak viz dollar

KARACHI: Pakistani rupee snapped a three-week losing streak against the US dollar in the interbank market last week, appreciating by 0.16 percent on a week-on-week basis.
According to the figures shared by the central bank, the rupee opened at 287.19 in the interbank market on Monday and closed at 286.74 on Friday, edging up by 45 paisas against the greenback. During the preceding three weeks, the local unit depreciated by 0.09 percent, 0.44 percent and 0.19 percent against the greenback in the interbank market.
During the current fiscal year 2022-23, Pakistani rupee has lost Rs80.85 against the US dollar in the interbank market, while it plummeted by Rs60.41 against the greenback in the current year.
Similarly, the rupee remained on an upward trajectory for the second successive week against the US dollar in the open market. The rupee was quoted in the range of Rs289-292 in the open-market against the greenback as compared to a range of Rs294-297 a week earlier, showing an improvement of Rs5 (+1.68 percent). In the preceding week, the rupee appreciated by Rs8 (+2.62 percent).
Finance Minister Ishaq Dar on Saturday introduced a number of changes to the budget for fiscal year 2023-24 in a bid to revive the International Monetary Fund’s programme and secure a stalled $1.2 billion tranche. Dar said that it was decided between Pakistan and the IMF for a “last final push” to move the review forward, which expires on June 30, following which detailed negotiations were held with an IMF delegation in the last three days to complete the ninth review.
Earlier, Prime Minister Shehbaz Sharif held a third meeting with IMF Managing Director Kristalina Georgieva in Paris in which he reiterated Pakistan’s commitment to complete the Fund’s programme. The managing director “appreciated” PM Shehbaz’s commitment to the country, according to a government’s statement.
Earlier, the IMF had raised several issues with Pakistan’s budget for FY 2024, saying that some of the proposed measures went against the IMF programme’s conditionality. For its part, the government responded to the global lender’s concerns, saying that it was “flexible” on the budget and remained engaged with the international lender to reach an “amicable solution”.
With reserves at critical levels for the past several months, Pakistan is in dire need of an IMF bailout, without which it may default. Pakistan’s foreign exchange reserves currently stand critically low at around $3.5 billion, providing only a three-week import cover. Between July and December 2023, Pakistan is expected to repay another $4.5 billion in foreign debt, excluding loans that are anticipated to be rolled over and refinanced in the first half of the upcoming fiscal year.
On the other hand, the SBP data revealed that the official reserve assets, including foreign currency reserves, IMF reserve position, Special Drawing Rights (SDRs), gold and other reserve assets, stood at $8.86 billion as of May 31, 2023. – TLTP