The rupee has come back to its downward trend on economic uncertainty, which is good news for the country.
KARACHI: People who work with the Pakistani rupee say that the three-day winning streak came to an end on Thursday, when it lost 42 cents against the dollar because of bad economic news.
To put it another way, the rupee lost 42 paisas to close at Rs185.87 to the dollar in the interbank foreign exchange market.
It doesn’t matter that the government and the International Monetary Fund (IMF) have agreed to restart and extend the Extended Fund Facility (EFF) programme, because bad macroeconomic figures are a big threat to the value of the local currency, dealers said.
Pakistan and the IMF agreed to extend the stalled bailout program for up to a year and increase the loan amount to $8 billion, which will help stabilise the markets and the rupee. This will help keep the markets and the rupee stable.
The IMF team will come back to Pakistan in May to keep talking about how to finish the seventh EFF review.
On April 7, the local currency fell to a record low of Rs188.18. This happened because the country was going through its worst political crisis, which led to uncertain economic conditions.
There have been two main reasons why the local currency hasn’t been as stable against the dollar as it used to be.
People in the country had $17.045 billion in foreign exchange reserves by the week ending April 16, 2022. At the start of this week, they were at $17.028 billion.
There was also a $36 million increase in the State Bank’s official foreign exchange reserves for the week ending April 16, 2022, from $10.85 billion the week before to $10.886 billion at the end of that week.
Commercial banks, on the other hand, had $6.157 billion in foreign exchange at the end of the week in 2022, down $19 million from the week before. This is compared to $6.178 billion.
Another reason the value of the dollar is going up is that the current account deficit is getting bigger. In the first eight months of the , fiscal year 2022/23, Pakistan’s current account deficit rose to $12 billion, up from $994 million in the same period of last year.
Since the start of this fiscal year, the local currency has been under pressure. This is how the rupee changed: It went from Rs157.54 to the dollar on June 30, 2021, to Rs185.87 today.
At 3:30 pm PST, the dollar was being bought and sold at Rs 185.5 and Rs 186.5 in the open market.
