Pakistan amounts highest $8bn remittances in July-Sept

The Pakistani rupee devalued close to the much anticipated Rs200 against the US dollar in inter-bank market. At around 3pm, it was trading at Rs199.61, dropped by Rs3.87 in a single day.

In the open market, the US currency was being traded at Rs200.50 around 4 pm.

The latest depreciation comes amid the resumption of talks between the government and the International Monetary Fund (IMF) for the revival of the stalled multi-billion dollar loan programme.

The domestic currency has maintained the downturn on the ninth consecutive working day as it cumulatively lost 7.5 percent or Rs13.92.

Importers have maintained panic buying of dollars on assumptions the IMF may not resume the loan programme after the government remained reluctant to fulfill its prerequisite conditions.

Finance minister Miftah Ismail said on Sunday that they would try to convince the IMF to soften their conditions.

The IMF had asked the government to withdraw subsidies on petroleum products and electricity.

Experts believe that the country badly needs for the IMF programme to be resumed to avoid the perpetually increasing risk of default on international payments including import payments and foreign debt repayment.

The country’s foreign exchange reserves have depleted to the critically low level of $10.3 billion which covers just six weeks of imports compared to the usual three-month import cover.

Importers made panic buying of the US dollar against limited supplies, as exporters delayed the receipt of payments from foreign buyers anticipating the rupee may touch the Rs200 level soon.

Taking cue, apparently from a sharp rise in Pakistan’s default risk in global bond markets, foreign investors have returned to the selling counters in the domestic market, as they pulled out $12 million (Rs2.34 billion) by offloading Pakistan Investment Bonds (PIBs) earlier today.

Meanwhile, the federal government was also reported to have imposed a complete ban on the import of unnecessary and luxury items to deal with the country’s unsettling economic woes on Wednesday.

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