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Rupee close to touching 200 mark against dollar once again

  • Rupee plunges to 199.75 against the US dollar in the interbank market.
  • Downtrend to continue till budget’s announcement, IMF loan approval.
  • Since start of fiscal year, rupee has collectively dropped by over 25%.

KARACHI: The Pakistani rupee plunged to 199.75 against the US dollar in the interbank market as concerns regarding the upcoming budget 2022-23 and revival of the multibillion-dollar International Monetary Fund (IMF) programme fueled a downtrend, according to forex.pk as of 11:30am Monday.

Today’s downtrend when the currency market opened was followed by a reversal on Friday in the rupee’s momentum as it shed 0.17% to close at Rs197.92 against the US dollar in the interbank market.

Since the start of this fiscal year on July 1, 2021, to date, the rupee has collectively dropped by over 25%, or Rs40, compared to the previous fiscal year’s close at Rs157.54.

Read more: Rupee reverses trend, sheds 0.17% against US dollar

Traders believe caution can be expected this week ahead of the unveiling of the fiscal year 2022-23 federal budget scheduled for June 10 (Friday), with investors expecting IMF conditions of fiscal consolidation to dominate.

Renewed pressure on the rupee on an increase in fiscal-year-end dollar demand from importers and the corporate sector will keep the local currency under pressure.

The report about China’s $2.7 billion deposit placement, meanwhile, has failed to entice traders as they don’t see it as useful for fiscal or external support.

Read more: Plan to jack up govt officials’ salaries by 5-15% under consideration

Pakistan’s foreign exchange reserves decreased by $378 million to $15.771 billion in the week ended May 27. Meanwhile, the State Bank of Pakistan’s reserves dropped to $9.723 billion from $10.088 billion, providing six weeks’ import cover only.

Financial expert Asad Rizvi said that credit rating agency Moody’s had last week downgraded Pakistan’s outlook from stable to negative due to external financing factors, to which the market reacted and the rupee dipped.

The financial expert further added choppy conditions would remain intact until the next fiscal year’s budget and the IMF approves the next tranche of loan for Pakistan.

Courtesy : GeoNews

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