KARACHI: The Pakistani currency plummeted to an almost 2.5-month low of Rs177.83 versus the US dollar in the interbank market on Thursday, as demand for foreign currency outstripped supply in the aftermath of increasing import payments.
The local currency finished at Rs177.62 against the greenback on Wednesday, according to figures issued by the State Bank of Pakistan (SBP).
The decrease was related to provisional trade deficit statistics that decreased by 10% month over month in February 2022.
Exports were $2.81 billion in February, while imports were $5.90 billion. During the first eight months of the current fiscal year 2021-22, the trade imbalance grew by 82 percent to $31.96 billion (July-February).
The Pakistani rupee has depreciated by 12.87 percent (or Rs20.29) since the start of the current fiscal year on July 1, 2021, according to data issued by the central bank.
For the previous ten months, the rupee has been on a downward trend. In comparison to the all-time high of Rs152.27 in May 2021, it has lost 16.78 percent (or Rs25.56) to date.
Investors are also keeping a close eye on the outcome of the International Monetary Fund (IMF) study.
In the face of a challenging international environment, Pakistan and the IMF are meeting this week to discuss Prime Minister Imran Khan’s relief package to cut fuel, diesel, and power costs.
On March 4, the IMF team will begin virtual negotiations with Pakistani officials, which will last two weeks in order to complete the seventh review under the $6 billion Extended Fund Facility (EFF) programme.
Traders are also keeping a tight eye on the conclusion of the Financial Action Task Force (FATF) plenary conference in Paris, which runs from February 21 to March 4, for clues on the rupee’s future path.
The FATF will decide whether Pakistan should be removed from the grey list in the near future.
