Rupee drops amid $2.5b financing shortfall

Pakistani rupee depreciates to Rs277.86 amid concerns over a $2.5 billion foreign financing shortfall.


Our Correspondent November 12, 2024
Reuters

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KARACHI:

Pakistani currency depreciated on Monday Rs0.12 to Rs277.86 against the US dollar in the inter-bank market, as concerns grew over a potential $2.5 billion shortfall in foreign financing in the ongoing fiscal year.

This marks the resumption of a downward trend at the beginning of the new week. According to the State Bank of Pakistan's (SBP) data, the rupee had closed on Friday at Rs277.74/$ with a day-on-day recovery of Rs0.16 from the seven-week low of Rs277.95/$ hit on Thursday. Exchange Companies Association of Pakistan reported that the local currency eased Rs0.03 on a day-on-day basis in the open market, closing at Rs278.77/$. The rupee came under some pressure as a review mission of the International Monetary Fund (IMF) arrived to conduct an early assessment of Pakistan's economy under a $7 billion loan programme. The first economic review was originally scheduled for March 2025.

The IMF team reached Pakistan due to the $2.5 billion shortfall in foreign financing for fiscal year 2024-25, mounting pressure on the rupee. The shortfall is expected to be overcome with the help of creditors such as Saudi Arabia, the UAE, Qatar and China. However, the rupee may continue to face pressure until the financing gap is bridged.

Meanwhile, the All Pakistan Saraf Gems and Jewellers Association reported that gold price decreased Rs1,300 to Rs277,500 per tola (11.66 grams) in line with the global trend. The precious metal dropped $13 to $2,670 per ounce (31.10 grams) in the international market.

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