Rupee continues slide, plunges to 204 against USD

Downward trend observed following delays in IMF bailout package; stocks fall by over 700 points

KARACHI:

The Pakistani rupee shed at least Rs1.75 against the US dollar in the interbank market to reach Rs204.10 before noon on Monday.

The rupee had closed at Rs202.35 against the dollar on Friday, as per the State Bank of Pakistan (SBP).

Similarly, the Pakistan Stock Exchange (PSX) touched a two-year low at 41,231 points by losing 784 points in the morning.

On Friday, the stock market had closed above 42,000 points as investors remained optimistic about the upcoming budget announcement.

The volatility in the stock market and exchange rate came after a statement by Finance Minister Miftah Ismail on Saturday wherein he had talked about a delay in the revival of the bailout package by the International Monetary Fund (IMF).

Read: Budgetary figures subject ‘to IMF deal’

Miftah had said the global money lending institution may have a number of objections on the federal budget 2022-23 presented in the National Assembly on Friday. Earlier, the minister had, however, said that the IMF programme was expected to resume after the budget.

The renewed uncertainties in rupee-dollar parity are seen despite an assurance by China to roll over a maturing debt worth $2 billion. Pakistan was scheduled to repay the $2 billion to China in the current month of June.

The country's foreign exchange reserves have depleted to a critically low level of six-week import cover at $9.2 billion. A boost in the reserves is necessary to stabilise the rupee and avoid worsening the balance of international payment crisis.

Last week, the Pakistan Stock Exchange (PSX) became the third-worst performing market in Asia, despite having won the title of Asia’s best-performing stock market in August 2020.