Pakistani Rupee has ended at a rate of Rs284.84 against the US Dollar in the interbank foreign exchange market on May 09, 2023. The cause of this latest development is attributed to delay in the finalization of tranche by the International Monetary Fund (IMF).
The local currency faced a decline, with a weakening of 99 paisas against the US dollar. This led to the currency closing at PKR 284.84 indicating a decrease from previous day’s closing rate of PKR 283.85.
The drop in the value of the rupee may be due to increase in demand for dollars, which occurred as the market opened on Monday, after the weekly holidays. Another contributing factor could be the current uncertain state of talks with the International Monetary Fund (IMF).
Despite the recent contraction in the import bill, which was a result of government efforts to reduce non-essential imports and promote domestic production, investors remain concerned about the ongoing political uncertainty surrounding election date issues and conflicts between parliament and the Supreme Court. Moreover, declining remittances and foreign exchange reserves are also contributing to these concerns.
READ MORE: Pakistani Rupee weakens by 26 paisas against dollar in interbank on May 8, 2023
During the first ten months of fiscal year 2022-2023, Pakistan’s import bill decreased by over 28 percent, leading to a contraction of the trade deficit by approximately 40 percent during the same period. These positive developments are a result of the government’s efforts to control non-essential imports, increase exports, and promote domestic production, thereby reducing the country’s dependence on imports and saving foreign exchange reserves.
However, the government must continue its efforts to maintain a sustainable trade balance and resolve political conflicts, in addition to securing financial assistance and support from international organizations and friendly countries. Positive developments, such as IMF assurances, funding commitments from Saudi Arabia and the UAE, and the ease of import and corporate payments ahead of Eid holidays, have eased some concerns.
In conclusion, the slight upward trend in the PKR’s value against the US dollar is a positive development, primarily due to the decline in the import bill. However, ongoing political and economic challenges have put pressure on the exchange rate, and the government must continue to make efforts to address these challenges and maintain a sustainable economic outlook.
READ MORE: Interbank closing rate May 5, 2023: PKR appreciates by 23 paisas against dollar
