Pakistani rupee hit a one-month low at Rs285.04 against the US dollar in inter-bank market on Monday, just Rs0.05 away from the all-time low of Rs285.09/$ touched in the first week of February 2023.
The State Bank of Pakistan (SBP) reported that the rupee dropped by 0.44%, or Rs1.25, and closed at Rs285.04/$.
A senior analyst said that the notable drop in the rupee’s value came following increase in import payment pressure while the supply of dollars remained limited.
Market talk suggests that a delay in revival of the IMF loan programme caused panic among importers, who scrambled to buy dollars at higher prices. Consequently, the rupee fell notably during the day.
Heightened political instability in the country is playing a key role in economic meltdown, piling more pressure on the rupee.
Latest reports suggest that Finance Minister Ishaq Dar will lead an economic team to the US to attend annual meetings of the IMF and World Bank from April 10 to 16. He is expected to make renewed efforts to persuade the IMF to revive its loan programme for Pakistan. The analyst hoped the government would succeed in two to three weeks.
“The rupee will make a partial recovery after the IMF’s resumption and the release of the $1.1 billion loan tranche,” he said. Following the IMF’s nod, other multilateral and bilateral creditors will also unlock financial commitments of around $9 billion, made for flood relief at the Geneva conference in January 2023.
Pakistan’s foreign exchange reserves have already depleted to $4.24 billion, barely enough for one month of imports.
The low reserves have caused a massive decline in imports of raw material, led to the closure of factories and rendered millions jobless.
Published in The Express Tribune, April 4th, 2023.
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