Pakistani currency maintained its downward trend for the second consecutive working day, as it dropped around half a percentage point, or Re1, to Rs217.66 against the US dollar in the inter-bank market on Tuesday.
The currency had closed at Rs216.66 against the greenback on Monday, according to the State Bank of Pakistan (SBP). “The currency has faced a renewed downward trend after the government announced that it will completely lift the ban on import of luxury goods, including expensive cars and mobile phones,” Pak-Kuwait Investment Company Head of Research Samiullah Tariq said while talking to The Express Tribune.
The currency had become overvalued after it hit a one-month high around Rs213-214 last week on increased supply of dollar in the country. “The currency is consolidating. It may continue to move in the range of Rs215-220 against the dollar in the short run,” he said.
Arif Habib Limited Head of Research Tahir Abbas said the resurfacing of demand for dollar for import payments and foreign debt repayment pressed the rupee to shed value against the greenback.
He, however, anticipated that the rupee would recover back to Rs200-205 over the next three to four weeks when the IMF would disburse next tranche of $1.2 billion in the first week of September 2022.
Latest reports suggest the IMF would release the next loan tranche within one week after its executive board gave final approval for the revival of the $7 billion loan programme for Pakistan. The IMF executive board is scheduled to meet on August 29, 2022 to consider giving the final approval.
Earlier, State Bank of Pakistan (SBP) acting Governor Murtaza Syed said that friendly countries had devised a strategy to provide additional financing worth $4 billion to Pakistan over the next 12 months.
The friendly countries including Qatar would provide $2 billion in bilateral financing. Saudi Arabia would provide $1 billion through the supply of petroleum products on deferred payment over the year, while the UAE would invest $1 billion in Pakistan.
Published in The Express Tribune, August 24th, 2022.
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