Dollar gains Rs7.30 against rupee within a week in open market
In interbank market, the rate has been increased by Rs7.60 within a week.
KARACHI (Dunya News) – The value of the US dollar against the rupee touched an all-time high of Rs151 on Friday by recording an increase of Rs7.30 in the open market within a week.
In interbank market, the rate has been increased by Rs7.60 within a week and it closed at Rs149 on Friday.
With the spike in the rate of US dollar, Pakistan’s foreign debt has increased by Rs800 billion with further rise in inflation being anticipated by analysts.
On Thursday, Pakistan’s rupee weakened to a record yesterday in an apparent devaluation, a few days after the South Asian nation secured a bailout from the International Monetary Fund (IMF) that investors speculate includes tough conditions to reform the economy.
Courtesy: Bloomberg
Pakistan is expected to adopt tough measures as part of its deal with the IMF, which investors speculate may include further currency devaluation. It secured its 13th IMF bailout since the late 1980s for about $6 billion earlier this week after a six-month delay.
“The IMF program was supposed to bring certainty. Unfortunately until now there is confusion,” Arif Habib, chief executive office at Arif Habib Corporation said in a televised program after meeting finance adviser Abdul Hafeez Shaikh as part of a business community delegation in Karachi on May 16. “We have asked the finance adviser to tell us what is going to happen. People have not been able to anticipate where the rupee and interest rates will stand.”
Pakistan’s benchmark stock index has erased half its market value over the past two years as the deterioration in the economy prompted rating agencies to downgrade the nation. The currency has plunged more than 20% in the past year, the worst performer in a basket of 13 currencies in Asia compiled by Bloomberg.
The central bank is due to meet Monday to decide on monetary policy, with economists from Intermarket Securities Ltd. and Foundation Securities Pvt among those expecting a seventh straight hike in interest rates.
The rupee dropped 3.6 percent, the most in more than five months, to 146.52 a dollar at close on Thursday, according to central bank data.
An exchange dealer explained another factor ‘the demand from Pakistanis planning to spend their vacations abroad after Eid holidays and during school vacations.’ Moreover, some buying has also been witnessed from travelers flying out for performing Umrah.
A few days ago, Prime Minister’s Adviser on Finance, Revenue and Economic Affairs Dr Abdul Hafeez Sheikh announced to have finalised a three-year bailout with the International Monetary Fund (IMF) for $6 billion.
The fall in the rupee’s value comes a day after Prime Minister (PM) Imran Khan set up a committee to control devaluation of the local currency and capital flight from Pakistan.
PM Khan presided over a high-level meeting with an ECAP delegation led by Sheikh Allaudin, Malik Bostan, and Mr Sheikh Mureed, director generals of the FIA and IB, the chairman of the Federal Bureau of Revenue (FBR) and the governor of the State Bank of Pakistan (SBP).
The meeting resolved that strict action will be taken against those responsible for deviating from the ‘actual’ exchange rates of currencies.
