The Pakistani rupee continued its downward trend as Friday’s session saw the local unit shedding its value in the interbank trading. The forex dealers said that during morning session, the US dollar was appreciated by 8 paisa and trading for Rs222.75. Yesterday, the American currency was settled at Rs222.67 at the close.

The Pakistani rupee seems to be in the free fall mode owing to a number of factors including opening of outstanding Letter of Credit (LCs) which is raising demand for the US dollar by the importers in the market; the precarious state of Pakistan economy as its benchmark 5-year Credit Default Swap (CDS) reached a historic high of 79.3% giving rise to default fears in the imminent future. Besides this, the swelling central government’s debt to Rs49.4 trillion in September 2022 has created uneasiness in the market.

 The PKR firmness is also hit by the delay in the International Monetary Fund’s (IMF) ninth review of the Extended Fund Facility (EFF) which was first scheduled to be held in the last week of October, but then it was rescheduled for Nov 3. But it was deferred again and could not be held till to date.

Pakistan and the IMF failed to finalize the schedule for formal talks due to lack of clarity on flood-related financial requirements for this fiscal year and declining revenue stream in the wake of import controls. Finance Minister Ishaq Dar had a virtual meeting with IMF’s mission chief to Pakistan, Nathan Porter, on Thursday.

During the meeting, both sides discussed the progress made with the ongoing IMF programme and Dar reiterated Pakistan’s commitment to successfully completing the IMF programme. The dollar has kept rising against the rupee for the last six sessions. According to the Mettis Global, the PKR lost Rs17.82 or 8% in FYTD, while it plummeted by Rs46.15 or 20.73% against the USD in CYTD.

Credit: Independent News Pakistan-INP