Rupee slips to Rs279.38/$ on political uncertainty
photo: file
Following low-intensity volatility in the open market, the Pakistani currency inched down to Rs279.38 against the US dollar in the interbank market due to ambiguity over political and economic fronts.
According to the State Bank of Pakistan (SBP) data, the domestic currency depreciated by 0.02% or Rs0.06 on a day-to-day basis, closing at Rs279.38 against the greenback.
The renewed depreciation in the currency is recorded following Moody’s Investors Service anticipated very high uncertainty regarding Pakistan securing the much-required next International Monetary Fund (IMF) loan programme amid heightened political uncertainty, as the ongoing $3 billion loan programme concludes in April 2024.
Any delay in the acquisition of the next programme will impact the rupee directly, as the country is due to repay significant foreign debt amidst low foreign exchange reserves, standing at $8 billion at present.
Read Rupee disparity grows amid political turmoil
The currency resumed its downturn in the major market following a cumulative loss of Rs0.58 in the past four consecutive working days due to concerns over a reduction in the supply of foreign currency in the open market.
The Exchange Companies Association of Pakistan (ECAP) reported the currency ticked down by Rs0.01 to Rs281.60/$ in the open market.
Therefore, the disparity in the value of the rupee between the interbank and open market slightly reduced to Rs2.22 (0.79%) compared to Rs2.27 (0.81%) a day ago. The spread stood at around Rs1.50 some days ago. The gap, however, remained significantly low compared to the IMF recommended limit of 1.25% (around Rs4 at current levels).
In the interbank market, the rupee had recovered almost 10% or around Rs28 in the past five months until the early days of this week.
Published in The Express Tribune, February 16th, 2024.
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