Rupee hits new low against dollar the

Pakistan is set to receive another $500 million from the International Monetary Fund (IMF) under a bailout package of $6 billion signed in July 2019.

Following the approval from the IMF Executive Board on Wednesday night, Pakistan will receive the payment in the next few days.

The US dollar is being traded at Rs 155.05 in the interbank market after closing down by 24 paisa on Thursday morning, compared to the previous closing of Rs 155.39.

The dollar is being sold at a rate of Rs 155.00 for buying and Rs 155.50 for selling in the open currency market today. The IMF Executive Board has completed combined second through fifth reviews of the Extended Arrangement under the Extended Fund Facility (EFF) for Pakistan, allowing for an immediate purchase equivalent of about $500 million for budget support. This brings total purchases for budget support under the arrangement to approximately $2 billion.

“We are looking at the dollar rate in between Rs 150 to 152 in the next few weeks,” said Malik Bostan, president of Pakistan Forex Association. He added that the rupee will take time to strengthen against the greenback, resulting from the absence of new demand for the US currency in Pakistan.

The tranche of $500 million will be received by the first week of April, Mr Bostan said, further claiming that Pakistani currency is still undervalued compared to India, Bangladesh, and Afghanistan. Following the IMF tranche, the rupee would appreciate against the dollar in Pakistan, he stated.

Malik said that the government is also planning to issue a $500 Sukuk bond by the end of this fiscal year to support the country’s reserves.

Zafar Paracha of Paracha money exchange said that the rupee looks strong in the near future, especially following the initiative of the central bank for opening Digital Roshan Accounts (DRA). Pakistanis living abroad are opening their accounts with Pakistani banks. So far, the country had received around $750 million through these accounts and over 100,000 accounts have been opened in different banks.

Syed Atif Zafar, an analyst at Topline Securities claims that the authorities have also continued to advance their reform agenda in key areas, such as consolidating the central bank’s autonomy, reforming corporate taxation, bolstering management of state-owned enterprises, and improving cost recovery and regulation in the power sector.

“These are all pre-conditions that the government has implemented over the last couple of months,” he added.


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