Pakistani currency eased Rs0.11 and closed at Rs278.41 against the US dollar in the inter-bank market on Tuesday, continuing its downtick for the second consecutive day on the back of mounting external debt payments.
According to the State Bank of Pakistan’s (SBP) data, the rupee had closed at Rs278.30 against the greenback on Monday. The depreciation came after global rating agency Fitch inquired how much foreign debt Pakistan had to repay in fiscal year 2024-25 and what were the available resources for payments, like reverting to commercial borrowing.
Recent estimates suggest Pakistan has to pay $23-24 billion including interest costs in the financial year that will end on June 30, 2025.
Also, developments related to Pakistan’s request to Chinese power plants operating in the country to reschedule the debt of $15 billion weighed on the rupee-dollar exchange rate. Any delay in rescheduling or Chinese denial will mount pressure on the domestic currency.
In addition to that, Pakistan is not on the agenda of next International Monetary Fund (IMF) executive board meeting. Though a staff-level agreement has been reached between Pakistan and the IMF, the board’s final approval is awaited for the award of a $7 billion loan programme.
Any delay or early approval of the IMF’s Extended Fund Facility will set direction of the rupee-dollar parity.
The local currency depreciated by a nominal Rs0.28/$ in the past two days. It remained largely stable in the range of Rs278-278.63/$ over the past four months.
Global rating agencies and local research houses have projected that the rupee will remain stable around current levels for the next four to six months.
Exchange Companies Association of Pakistan (ECAP) reported that the rupee remained stable at Rs280/$ in the open market for the second successive day.
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