Pakistani Rupee Down Slightly Against US Dollar in Interbank Market

Mon May 20 2024
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ISLAMABAD: After a slight appreciation by 30 paisa last Friday, the Pakistani rupee on Monday witnessed a marginal decline by 9 paisa against the US dollar in the interbank market to settle at Rs 278.30 against the previous day’s closing of Rs278.21, according to State Bank of Pakistan (SBP).

In a major development, amid the ongoing engagements between the government and the International Monetary Fund (IMF), apart from other conditions, the lending body is of the view that Pakistan needs to further enhance its foreign exchange reserves and the loopholes in the current account deficit disparities.

It is worth mentioning here that as a precedent, the IMF mostly favours providing grants to countries having foreign reserves over $10 billion. At present, Pakistan’s central bank reserves stand above $9 billion and below the $10 billion benchmark.

US Dollar in International Market

Meanwhile, the US dollar also facing fluctuation in the international market and is still awaiting clues from the upcoming possible rate cut by the Federal Reserve officials, which is yet to be known in the near future.

Pakistani Rupee Against US Dollar

Recently the local unit witnessed both appreciation and depreciation, against the American dollar with recent continued improvement. From September, till the middle of October 2023, the local currency registered appreciation for a record 28 consecutive sessions against the American dollar, followed by a continuous fall for 17th consecutive sessions from October till the middle of November 2023.

However at the end of December 2023, and then in January 2024, the Pakistani unit mostly enjoyed appreciation against the greenback amid the inflow from the IMF followed by a $2b rollover each from the UAE (January) and China (February). As a result, the Pakistani rupee improved by over Rs7 in the interbank during the last two to three months.

In another recent development, Pakistan received $1.1 billion from the International Monetary Fund (IMF) as a final tranche of the $3 billion Stand-By Arrangement (SBA), on April 30. Pakistan is now looking for a longer program from the IMF to further overcome the economic quagmire. However, the expected program might be followed by inflation and price hikes amid tough conditions from the lending body in the shape of further taxation.

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