ISLAMABAD - Pakistani rupee further lost its value on Monday and closed at an all-time low of 269.63 against the US dollar in the interbank market. The local currency is under severe pressure after the government in the last week had decided to end its control on its price in order to fulfil the conditions of the International Monetary Fund (IMF) officials to revive the loan programme.
The local currency, which had closed at a record low of Rs262.6 on Friday, fell Rs7.03 to a dollar or 2.61 percent yesterday, according to the State Bank of Pakistan. The currency was changing hands with the dollar at 275 in the open market. The currency has cumulatively slumped by 14.36% or Rs38.74 in the three days, compared to Wednesday’s close of Rs230.89 to a dollar. The local currency is losing its value amid talks between Pakistan and IMF that would continue from January 31 February 9 in Islamabad for the 9th Extended Fund Facility (EFF) review. The government had allowed currency depreciation from last Wednesday. Later, the government on Sunday had also announced a massive increase in petroleum products’ prices which might help Islamabad to break the deadlock in the upcoming parleys with the IMF and pave the way for the revival of the Fund programme.
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Meanwhile, an official of the Ministry of Finance informed that Pakistan would accept the four major demands made by the IMF to revive the progrmme, including increase in electricity prices, market-based exchange rate and additional taxes to cover the fiscal deficit. The official said that the Federal Board of Revenue (FBR) has drafted proposals of new taxation measures of nearly Rs300 billion to be enforced through the promulgation of the Tax Laws Amendments Ordinance, 2023 The IMF team would visit Pakistan at the time when country’s foreign exchange reserves have fallen to an alarming level. “During the week ended on 20-Jan-2023, SBP’s reserves decreased by $923 million to $3,678.4 million due to external debt repayments,” said State Bank of Pakistan. The total liquid foreign reserves held by the country stood at $9.453 billion as of 20-Jan-2023. Foreign reserves held by the State Bank of Pakistan are $3,678 billion and net foreign reserves held by commercial banks are $5,774 billion. The reserves are declining due to the repayment against previous loans.
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