Pakistani rupee slightly dropped by 0.13%, or Rs0.38, at Rs238.50 against the US dollar on Monday, ending two consecutive days of winning streak in the inter-bank market.
Market talk suggested that there was a slight increase in demand for the dollar, when trading resumed after a long weekend spanning four days.
It was contrary to expectations of a continuous uptrend in the rupee’s value in the wake of removal of the condition of depositing up to 100% advance payment for imports.
Pakistan has reopened imports for a full range of goods to meet another condition of the International Monetary Fund (IMF) to pave the way for the resumption of $6.5 billion loan programme.
Experts were, however, of the view that the lifting of cash margin condition would make no difference since Pakistan had critically low foreign currency reserves of $4.6 billion. With these limited reserves, the country may only finance imports for about a month.
Moreover, they did not see the revival of IMF’s programme anytime soon, considering that Pakistan had to take financial commitments of $6-7 billion from friendly countries, which have so far given a cold response owing to a heightened political crisis in the country.
Earlier, the rupee recovered 0.28%, or Rs0.81, over two days and reached Rs283.20 against the greenback, according to SBP data. The domestic currency hit an all-time low close at Rs285.09/$ in the first week of February 2023, after the global lending institutions expressed concern about continued government control over the rupee-dollar parity.
The government has taken a number of tough decisions to revive the IMF’s programme, including reinstating the market-based exchange rate, increase in energy tariffs and presenting a mini-budget of Rs170 billion.
However, the fund comes up with a new condition every time Pakistan approaches it.
Published in The Express Tribune, March 28th, 2023.
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