Rupee stays stable, falls just 0.05%

Draws support from IMF remarks on $3b loan programme

KARACHI:

Pakistani currency continued to stabilise around current levels on Thursday, ticking down 0.05%, or Rs0.14, to Rs287.60 against the US dollar in the interbank market. Following in the footsteps of the inter-bank market, the currency inched down 0.08%, or Rs0.25, to Rs294.75 against the greenback in the open market, according to the Exchange Companies Association of Pakistan.

Market talk suggested that the demand and supply of the US dollar had remained stable, preventing a major decline in the rupee’s value. Latest data on worker remittances, however, showed that inflows dropped 7% to $2 billion in July 2023 compared to the previous month, slowing down the flow of greenback in the inter-bank network. On the other hand, the rupee got support from reports that the IMF would continue to work with Pakistan to complete its latest nine-month loan programme of $3 billion despite likely delay in general elections slated for late 2023.

A seasoned businessman noted the other day that the currency had depreciated by a net 1% in the past three months despite significant fluctuations. It hit an all-time low at Rs299/$ in May in the wake of high political drama and poor law and order situation. Later in July, it reached a recent high near Rs275/$ after the country won an IMF lifeline of $3 billion in late June. The government has removed all restrictions on imports on the IMF’s recommendation under its loan programme, which may pile pressure on the rupee. However, experts believe imports will stand lower in the range of $4-4.5 billion in the coming months.

The import volume is not anticipated to exceed beyond the total value of export earnings and worker remittances.