KARACHI: The Pakistani rupee fell to 200.50 per US dollar in the interbank market as concerns over the approaching budget 2022-23 and the resurrection of the multibillion-dollar International Monetary Fund (IMF) programme spurred a decline as of 11:30 am Monday.
Today’s downward trend in the currency market was followed by a reversal in the rupee’s momentum on Friday, when it fell 0.17 percent to close at Rs197.92 against the US dollar in the interbank market.
Since the start of the current fiscal year on July 1, 2021, the rupee has decreased by more than 25%, or Rs40, compared to the previous fiscal year’s close of Rs157.54.
Traders predict caution this week ahead of the release of the fiscal year 2022-23 federal budget on June 10 (Friday), with investors anticipating IMF fiscal austerity conditions to dominate.
The rupee will face renewed pressure as fiscal-year-end dollar demand from importers and the corporate sector rises, putting pressure on the local currency.
Meanwhile, the report on China’s $2.7 billion deposit placement has failed to captivate traders because they do not regard it as useful for fiscal or external support.
Pakistan’s foreign exchange reserves fell by $378 million in the week ending May 27 to $15.771 billion. Meanwhile, the State Bank of Pakistan’s reserves fell to $9.723 billion from $10.088 billion, covering only six weeks of imports.
According to financial analyst Asad Rizvi, credit rating agency Moody’s lowered Pakistan’s outlook from stable to negative last week due to external financing considerations, causing the market to react and the rupee to fall.
The financial expert went on to say that the rough conditions would last till the next fiscal year’s budget and the IMF approved Pakistan’s next tranche of loans.
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