The Pakistani Rupee continues to be volatile as it depreciated by Rs1.39 against the USD during the interbank market and closed at Rs171.9 in the trading session.
Earlier, the domestic unit plunged to an all-time low of Rs175.27 against the greenback as a result of Pakistan’s deadlock with the International Monetary Fund (IMF) over the revival of the $6 billion bailout package.
However, following Saudi Arabia’s financial assistance worth $3 billion and the oil facility on deferred payments worth $1.2 billion halted the downward trend and boosted the local currency.
CEO at Alpha Beta Core Khurram Schehzad said that PKR has been on a decline for the past two sessions due to the uncertainty over the resumption of the IMF program and the lack of clarity in this regard were further driving the fall.
He added that apart from that, the skyrocketing inflation results in Pakistan enhancing the import of essential commodities to stabilize the prices in the domestic market leading to rising demand for the US dollar. Furthermore, the expectation of the rising imported inflation has triggered panic buying of the greenback.
Schehzad “Furthermore, the State Bank of Pakistan has not made any announcement regarding the receipt of $3 billion from Saudi Arabia which is dampening the market sentiment. The central bank might have received the amount and it should update the citizens about the development as it will strengthen the market sentiment.”
Managing Director and CEO at Arif Habib Commodities Ahsan Mehanti is of the view that the delay in complying with a few conditions laid down by IMF and in the approval of the next tranche was causing rupee depreciation.
He added that matters regarding the autonomy of the SBP, hike in petroleum development levy, and the power tariff rationalization were awaiting conclusion.
Mehanti added that approval and release of the next tranche worth $1 billion would potentially halt the rupee’s slide and aid in the recovery of the local currency against the dollar.