Pakistani rupee deals heavy blow to US dollar

F.P. Report

ISLAMABAD: The Pakistani rupee dealt a heavy blow to the US dollar and brought it down under Rs200 marks as the government sprang into action to appease the International Monetary Fund (IMF) for revival of its loan programme.

As the intrabank market opened on Friday, the emboldened Pakistani rupee rocketed past the US dollar by over rupees two.

According to the forex dealers, the greenback was now being traded at Rs199.75 down Rs2.26 against the Pakistani rupee.

The American currency closed the day at Rs202.01 on Thursday afternoon.

The government in order to get revived its loan programme with IMF has started to implement its directives and had heavily increased the prices of petroleum products on Thursday night.

The International Monetary Fund (IMF) late Wednesday delayed the revival of the stalled $6-billion programme under the External Financing Facility (EFF) for Pakistan.

The revival was expected to bring stability to the financial markets, the fast-weakening Pakistani rupee, and the depleting foreign exchange reserves, as the government had pinned hopes on the programme’s resumption.

Pakistan failed to convince the IMF, as both sides could not reach a staff-level agreement despite week-long negotiations in Doha, Qatar, from May 18-25.

The Fund, in a statement, has emphasised the abolition of subsidies on petroleum products and electricity, among other conditions, as a prerequisite for the programme’s revival.

Following the conclusion of the talks, IMF Mission Chief for Pakistan, Nathan Porter, said the Fund held constructive discussions with the Pakistani officials, which aimed at reaching an agreement on policies and reforms. “Mission has held highly-constructive discussions with Pakistani authorities aimed at reaching an agreement on policies and reforms that would lead to the conclusion of the pending seventh review of the authorities’ reform programme, which is supported by an IMF Extended Fund Facility arrangement.”