KARACHI: The Pakistani Rupee experienced a decline of 54 paisas against the US dollar on Monday, signaling increased demand for imports and corporate payments, according to market dealers.
The interbank foreign exchange market witnessed the rupee closing at Rs138.94 to the dollar, compared to the previous Friday’s closing rate of Rs138.40.
The day’s trading in the interbank foreign exchange market began within the range of Rs138.90 and Rs138.95. The market recorded a high of Rs138.95 and a low of Rs138.94, ultimately closing at Rs138.94. Simultaneously, the rupee faced depreciation in the open market against the dollar, with buying and selling rates recorded at Rs138.50/Rs139.20, deviating from the previous Saturday’s closing rates of Rs138.20/Rs138.70 in the cash-free market.
Market sources have attributed the rupee’s depreciation to the recent discussions between Pakistan and the International Monetary Fund (IMF) regarding a new loan program. The country has been grappling with a challenging fiscal situation over the past year, further exacerbated by the fluctuations in the exchange rate.
The finance ministry has highlighted revaluation losses as a significant factor contributing to the fiscal strain. These losses stem from the appreciation of international currencies against the US dollar and the depreciation of the Pakistani Rupee against the greenback, collectively increasing the total public debt by approximately Rs 1.2 trillion.
Pakistan’s engagement with the IMF for a new loan program indicates the severity of the economic challenges faced by the country. The IMF, as a key international financial institution, plays a crucial role in providing financial assistance to countries facing economic difficulties, often accompanied by the implementation of structural reforms.
The ongoing fiscal challenges underscore the need for Pakistan to address issues related to its external debt, exchange rate stability, and overall economic resilience. The government may need to implement comprehensive economic reforms to stabilize the currency and create an environment conducive to sustainable economic growth.
Market analysts are closely monitoring the situation, as the exchange rate dynamics are not only influenced by global economic trends but also by the country’s domestic economic policies. As Pakistan navigates its economic challenges, prudent fiscal management and effective policy implementation will be crucial to restoring confidence in the financial markets and ensuring a stable economic outlook.
In the coming weeks, stakeholders will keenly observe any developments in Pakistan’s negotiations with the IMF and how the government plans to address the fiscal challenges to promote economic stability and growth in the long term.
