‘Unimpressed’ US dollar pushes Pakistani rupee further down
January 10, 2023 12:07 PM
The rupee was depreciated by another 47 paisas against the US dollar in the interbank trading on Tuesday apparently ignoring the positive outcome of the Geneva conference where billions of dollars were pledged to rebuild Pakistan’s flood-affected regions, reported 24NewsHD TV channel.
According to currency dealers, the greenback continued its upward trajectory during the trading activity on Tuesday and appreciated by 47 paisas. It ended the traded for the day at Rs227.88.
Yesterday, the PKR slid 27 notches down letting US dollar to settle at Rs227.41 towards the close.
The local unit is constantly under stress due to bleak macro indicators, dwindling forex reserves and delay in the IMF’s tranche. But after yesterday’s Geneva conference, it is hoped that the country would get a respite.
Prime Minister Shehbaz Sharif on Monday asked the IMF for a pause in its demands for economic reforms before releasing more financial aid, as the country tries to rebuild after catastrophic floods.
“We had to again connect with the IMF and resurrect an agreement which was violated by the previous government -- and accept even harsher conditionalities," said Shehbaz.
He said Pakistan was complying with the IMF's conditions "as best as possible" but asked "how on earth" the additional burdens could be shouldered by the country's poorest.
"Yet we are committed to IMF's programme. We will do everything to comply with the terms and conditions. Though I am constantly trying to persuade them: please give us a pause," he said.
Shehbaz spoke with IMF Managing Director Kristalina Georgieva on Saturday and asked her to "kindly be considerate and compassionate and give us some breathing space", he said.
The Bloomberg Economics reported on Monday it looks like the country of 220 million people will dodge default in the next six months.
The Bloomberg projected that the lender of the last resort—IMF—will release the remaining loan tranches totalling $2.6 billion, given Pakistan's desperate need in the wake of cataclysmic floods, which caused damages worth $30 billion.
Moreover, a nod from the IMF will help unlock financing worth $5 billion from bilateral creditors and $1.7 billion from the World Bank. All these funds will help cover debt payments worth $5.9 billion and estimated twin deficits by the end of the ongoing fiscal year 2022-23.
Besides this, in a crucial financial relief for Pakistan today, the Kingdom of Saudi Arabia has hinted at increasing its investment in the country to $10 billion. It has also suggested to deposit $2 billion more in country’s central bank in order to shore up its forex reserves.
With the forex inflows coming to the central bank, the market is expected to pick up and rupee is likely to get a boost in the coming days.
Reporter Ashraf Khan