By The Pakistani rupee faced a slight dip against the US dollar, declining by 0.03% in the inter-bank market. It settled at PKR 278.2 per USD, a drop of over 7 paisa compared to its previous closing rate of PKR 278.12 per USD.
During today’s trading, the PKR saw fluctuations with an intraday high (bid) of 278.45 and a low (ask) of 278.25, indicating volatility in foreign exchange markets.
Amidst these currency fluctuations, Pakistan has commenced formal discussions with the International Monetary Fund (IMF) for a longer and larger program, aiming for economic stability.
This step follows Pakistan’s successful performance under the Standby Arrangement with the IMF, meeting all seven Quantitative Performance Criteria (QPCs) for end-December 2023.
However, concerns persist regarding potential social tensions in Pakistan due to its intricate political landscape and high living costs. The IMF has cautioned that these factors might hinder policy and reform implementation efforts.
In the interbank market, the rupee closed at 278.20 per dollar, slightly lower than the previous close of 278.12. According to currency dealers, dollar demand from importers coupled with limited supplies influenced this decline.
In the open market, the rupee depreciated further, ending at 279.55 against the dollar, down by 35 paisas from the previous session, reflecting the interbank market’s depreciation.
Analysts predict the rupee will remain range-bound in the near term, with possible downward pressure in the coming months. However, they believe it’s unlikely to fall below 270 to the dollar, as doing so could disrupt the trade balance and isn’t favored by the IMF.
A delegation from the IMF has arrived in Pakistan to negotiate a new loan program. The IMF has emphasized Pakistan’s commitment to a flexible exchange rate and transparent interbank foreign exchange market to support external sector rebalancing and reserves building.
In the interbank market, the PKR saw losses against some major currencies, including the Saudi Riyal, UAE Dirham, and Canadian Dollar.
While the Pakistani rupee faces fluctuations against the US dollar and other major currencies, Pakistan’s initiatives towards economic stability through IMF negotiations are underway. Despite challenges, analysts remain cautiously optimistic about the rupee’s future trajectory.
