Rupee plumbs new low at 287.29 vs dollar
Rupee the Pakistani rupee fell to a new record low of 287.29 rupees against the US dollar on Tuesday following persistent delays in reviving the International Monetary Fund’s (IMF) loan program and the risk of default on foreign debt repayments. The rupee fell 0.78%, or Rs 2.25, to close at Rs 287.29 against the dollar in the interbank market, the State Bank of Pakistan (SBP) reported. It closed at Rs 285.
04/$ on Monday. Earlier, the domestic currency touched a record low of Rs 285.09/$ on March 3, 2023, a month ago. In a brief comment to The Express Tribune, Mohammad Sohail, managing director of Topline Securities, said, “The delay in the IMF loan program and the inflow from friendly countries has created some panic in the foreign exchange market”.
Market chatter suggests importers have panicked to buy US dollars as their supply has dwindled. This is despite the government announcing that Finance Minister Ishaq Dar will visit the US from April 10 to 16 to attend the annual meeting of the IMF and the World Bank, where he will try to persuade the IMF to join to the $6.5 billion to restart the loan program.
Pakistan has been in talks with the IMF since late January as delays in reviving a loan program that has been suspended since November 2022 have stifled the inflow of foreign financing. As a result, the country’s foreign exchange reserves fell to a critical low of $4.24 billion.
Analysts expect Pakistan to default on its foreign debt in the near future. It must repay $4.5 billion within three months (April-June), but half of the amount is expected to be extended. Gold shines Gold prices rose to a new record.
Published in EDP BLOGS on June 22,2023.
