The Pakistani rupee continued its downward trajectory against the US dollar as the local unit shed another 10 paisas in the interbank trading on Friday. As per the data provided by currency dealers, the value of US dollar was appreciated by 10 paisas against the Pakistani rupee making the greenback to be traded at Rs229.25 in interbank trading today. Yesterday, the US dollar ended the day at Rs229.15, registering a surge of 24 paisas in its value.

The foreign currency experts are of the view that mounting demand for dollars is putting pressure on the local currency. Apart from this, falling inflows under exports and remittances also resulted in devaluation of the rupee. However, country’s total foreign exchange reserves inched up by $256 million by week ended January 13, 2023, State Bank of Pakistan (SBP) said on Thursday. The foreign exchange reserves of the country increased to $10.444 billion by week ended January 13, 2023 as compared with $10.188 billion a week ago i.e. January 06, 2023.

But the present level of the official reserves is below one month import cover. The current freefall of the Pakistani rupee could be attributed to the non-resumption of the IMF loan programme. The only hurdle behind the delay in IMF’s deal is the continuous delay in complying with the fund’s conditions.

State Minister for Finance and Revenue Ayesha Ghaus Pasha on Thursday highlighted that the government wants to continue programme with the International Monetary Fund (IMF) in such a way that the common man should not bear the burden of tough decisions to be made as per the Fund’s condition.

She, however, did not give any date when to start talks with the IMF team but said that the government is firm to go with the programme after having a detailed workout. “The government’s economic team is having meetings with the prime minister to focus on its programme with the IMF,” she added.

In the absence of IMF bailout package, the country is facing serious decline in its import, export and direct foreign investment. As per the latest data revealed by the central bank, the inflow of foreign direct investment (FDI) into Pakistan during 1HFY23 plunged by 58.7% YoY to $461 million, compared to $1.11 billion during the same period last year. The exports also exhibited decline of 6 per cent to $14.25 billion during the 1HFY23 as compared with $15.13 billion in the same half of the preceding fiscal year.

The massive decline in import bills sharply narrowed the trade deficit during the period under review. The trade deficit narrowed by 33 per cent to $17.13 billion during July – December of fiscal year 2022-2023 when compared with the deficit of $25.44 billion in the corresponding period of the last fiscal year.

On the other hand, the inflow of workers remittances declined by 11 per cent in first half (July – December) of fiscal year 2022-2023. Reportedly, Secretary Finance Hamed Yaqoob Shaikh has formally written to the IMF mission chief to visit Pakistan. According to experts, the IMF bailout package is the only cure for all the challenges Pakistan is facing today and there is no other exit route from default unless the Fund mission has been requested to sit across the table and finalise the deal.

Credit : Independent News Pakistan-INP