Pakistan’s currency hit a new historic low as the US dollar closed at Rs276.58 in the interbank market on Friday. This came as a result of widespread anxiety about the outcome of ongoing talks between Pakistan and the International Monetary Fund (IMF).
According to the State Bank of Pakistan, the Pakistani rupee dropped to a new record low of Rs276.58 against the US dollar on Friday, down from a previous low of Rs271.36 on Thursday (SBP).
Meanwhile, at market close today, the value of one US dollar was Rs283.2, up Rs12.45 from the previous day’s value.
The previous day’s trading showed a drop of 0.18% in the open market and a loss of 0.93% in the interbank market for the rupee.
According to analysts, the IMF is holding firm in its negotiations with Pakistan to enforce its preconditions. In addition to rejecting the government’s circular debt plan, the lender has demanded political consensus on the restart of the loan programme.
Despite repeated government requests, the IMF has not loosened its draconian restrictions. The instability of financial markets and the accompanying economic uncertainty is continuing as a result.
However, the government has promised the international financial institution that it will follow all of the conditions set by the lender. On February 9, 2023, the end of the current round of talks will be announced after having lasted for ten days.
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With a 16.1% drop to $3.09 billion in the week ending January 27th, the central bank’s foreign exchange reserves now cover less than three weeks’ worth of imports, according to analysts.
The State Bank of Pakistan attributes the decline in reserves to the country’s efforts to pay down its external debt.
Amid a “unimaginable” economic crisis, Prime Minister Shehbaz Sharif said today that the IMF was being difficult in its demands to release funds from a $6.5 billion bailout.
The value of the rupee plummeted to an all-time low against the US dollar in the hours following his comments.
Since the artificial cap was removed last week, the value of the rupee has fluctuated by 16.5% as determined by the market-based exchange rate regime.
According to the association of exchange companies, the value of the rupee dropped 2.65 percent against the dollar on the open market.