Rupee stops losing streak, gains 0.14% against US dollar

F.P. Report

KARACHI: The Pakistani rupee reversed the falling trend on Friday, selling at 186.70 against the US dollar in the interbank market halting the slide that has seen it lose nearly 3% since Monday.

On Friday, the local currency recorded a minimal rise of 0.14% against the US dollar due to the anticipation of the resumption of the International Monetary Fund (IMF) programme.

Earlier, Alpha Beta Core CEO Khurram Schehzad had said: “The market is reacting to the uncertainties regarding rollover of $2.4 billion in debt from China, IMF programme and depleting reserves.”

Regarding the depreciation, he revealed that currently, Pakistan’s reserves are not even sufficient for two months, “and rupee depreciates when the investors and traders speculate widening gap between the demand and supply of the US currency.”

The rupee has maintained a downward trend for the last 12 months. It has lost 22.61% (or Rs34.43) to date, compared to the record high of Rs152.27 recorded in May 2021.

With a fresh rise of 0.14%, the Pakistani rupee has depreciated by 18.5% (or Rs29.16) since the start of the current fiscal year on July 1, 2021, data released by the central bank revealed.

It is worth mentioning that the high demand for the greenback because of import payments, particularly oil, the dwindling forex reserves and the ambiguity about the IMF loan programme have eroded investors’ confidence, driving the rupee down.

Moreover, the market is apprehensive about the lack of foreign inflows and the rupee is likely to remain under pressure until the reserves are built up and steps are taken to tackle the balance of payments and fiscal deficit.

Going forward, the currency market is also eagerly keeping an eye on the balance of payments data for a further clue on the rupee’s future direction.

Traders also keeping a close eys on the outcome of the IMF-Pakistan negotiations, which will continue till April 24 for which Finance Minister Miftah Ismail and SBP Governor Reza Baqir have reached Washington.