In a recent development, the Pakistani Rupee (PKR) has gained against the US dollar by eight paisas, following a reduction in political tensions in the country.
On Friday, the exchange rate ended at PKR 283.84 to the dollar, as compared to the previous day’s closing rate of PKR 283.92 in the interbank foreign exchange market.
READ MORE: PKR weakens against dollar at interbank closing on April 27, 2023
Experts believe that the initiation of dialogue between the ruling party and the opposition to resolve the issue of the election date has helped the local currency to make a gain. However, they also point out that the roadblocks in the International Monetary Fund (IMF) loan program remain a major concern for investors.
READ MORE: PKR to dollar at interbank closing on April 26, 2023
Furthermore, the mounting demand for foreign payments has further pressured the exchange rate, while the political uncertainty arising from the conflict between the parliament and the supreme court over the Punjab elections has also contributed to the decline in the PKR.
READ MORE: PKR to dollar interbank forex market closing on April 20, 2023
Although the PKR has been volatile for several months due to uncertainty related to the IMF loan program, the recent current account surplus has given some relief to the local currency. The current account had posted a surplus for the first time in over two years in March 2023. However, the PKR had reached a historic low of PKR 288.42 to the dollar on April 11, 2023.
READ MORE: PKR to Dollar in interbank foreign exchange market on April 19, 2023
Experts are concerned about the decline in remittances and the depletion of foreign exchange reserves, and they are urging for quick action to stabilize the currency and attract foreign investment. Positive developments, such as assurances from the IMF regarding Pakistan’s ability to repay its loans, commitments from Saudi Arabia and the UAE to fund Pakistan, and the ease of import and corporate payments before Eid holidays, have helped alleviate concerns about the country’s financial stability.
The IMF loan program is a crucial component of Pakistan’s economic recovery plan, and the delays and roadblocks in this program have led to further uncertainty and volatility in the foreign exchange market. It is vital for the Pakistani government to take swift and effective action to stabilize the currency and address the underlying economic challenges facing the country.
