Pakistani currency on Thursday made a notable recovery of almost half a percentage point, or Rs1.39, and stood at Rs285.74 to a dollar in the inter-bank market as the government apparently tightened its control over the faltering economy to ward off the threat of default.
The partial recovery of the rupee, however, further widened the gap in exchange rates prevailing in the inter-bank and open markets to Rs23 per dollar. In the open market, the domestic currency remained unchanged at Wednesday’s all-time low of Rs309/$.
The inter-bank market maintained the uptrend for the second consecutive working day but the trend suggested that either the government was controlling the rupee’s movement or the market had stopped taking cue from the recent worrisome developments.
A day ago, Finance Minister Ishaq Dar hinted at ending the stalled International Monetary Fund (IMF) loan programme without revival as very little time was left to complete the ninth, tenth and eleventh reviews under the programme, which is going to end in five weeks on June 30.
At the same time, the finance minister assured businessmen that Pakistan would not default on external debt obligations and would make all payments on time.
The expiry of IMF programme without revival will prove negative for the rupee-dollar exchange rate because foreign currency inflows from other global lending institutions and friendly countries will also not materialise.
Published in The Express Tribune, May 26th, 2023.
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