The downfall of Pakistani rupee continued its record-breaking trend, when it hit a new all-time low at Rs 182.34 compared to the US dollar in the inter-bank market on uncertainties that the International Monetary Fund (IMF) may suspend its $6 billion loan programme temporarily.
As per the central bank data, a fresh drop on Tuesday resulted in the cumulatively declined rupee by Rs 3.83 against the US dollar in the previous two weeks, as it stood at Rs 178.51 on March 11.
Meanwhile, the IMF is conducting a seventh review of the economy under its proceeding loan programme and it is expected it may put the programme on hold when government subsidized fuel products and power tariffs, which was in contradiction with the IMF conditions. This was informed by Ismail Iqbal Securities Head of Research Fahad Rauf and KASB Securities Head of Research Yousuf Rahman while speaking to the media.
Read more: Rupee depreciates slightly to settle at Rs 176.22 against US Dollar
The IMF is to declare the results of the seventh review on Tuesday.
Besides, Finance Minister Shaukat Tarin said the government has satisfied the fund about the resources from which it will be funding the subsidy of about $1.5 billion till June 30, 2022.
The postponement in the IMF programme would stop the release of the next loan tranche to Pakistan, as per the analysts.
“If the IMF programme is delayed, the rupee may fall to around Rs185 soon, if the central bank does not intervene,” Rauf said, continuing the State Bank of Pakistan (SBP) may inject dollars into the market “if it finds the rupee losing ground against the greenback unnecessarily”.
“We see the rupee at around 182 by the end of the current fiscal year on June 30, 2022”, Yousuf said.
Pakistan mostly depends on imported energy, while constant depletion of the foreign exchange reserves has caused panic among importers, who are willing to buy the foreign currency at a record low exchange rate in the inter-bank market.
