USD to PKR: Pakistani Rupee to Crash further to 275 Per Dollar: In FY22, the current account deficit (CAD) registered a huge increase of USD 17.4 billion.
In addition, Toyota and Suzuki, also two of Pakistan’s largest car manufacturers, are planning partial plant shutdowns next month due to the unavailability of raw materials amid import restrictions and fluctuations in the exchange rate, according to senior officials at both companies.
It is estimated that the Pakistani rupee depreciated at a record low against the US dollar on Thursday as it slumped to PKR 240.5 in the interbank market against the dollar.
SEE ALSO: The Pakistan Economy is at High Risk
As per the Dawn newspaper’s report quoting the Forex Association of Pakistan (FAP), the Pakistani rupee lost 4.48 per cent, or 1.89 per cent, against yesterday’s closing price of 236.02 by 12:03 p.m.
For the continuous rupee depreciation, the General Secretary of the Exchange Companies Association of Pakistan, Zafar Paracha, blamed the political situation and the government’s inaction as the reasons for the continuous fall in the rupee value.
“It appears as though the government and political parties do not have any concern about the country’s political situation, despite the fact that it is bad. There is only one thing they are concerned about, and that is saving their government,” Paracha said.
In the midst of an ongoing political crisis, the financial markets remained jittery.
According to the Foreign Exchange Association of Pakistan, the rupee has lost over 30% of its value since 2022.
It is hoped that the pressure on the rupee will ease in a couple of weeks, according to Pakistan’s Finance and Revenue Minister Miftah Ismail on Wednesday.
“From the next month onward, exports and remittances will generate more dollars than imports and debt servicing will generate. In this way, the rupee’s pressure would subside and the currency would appreciate,” Ismail said.
Several factors have contributed to the rupee’s depreciation, including the US dollar reaching historic highs internationally, interest rate hikes, inflation worldwide and disruptions in supply chains.
As part of its extended fund facility (EFF) reviews, the IMF and Pakistan authorities reached a staff-level agreement earlier this month.
Pakistan’s Business Recorder reports that despite the agreement, investors are concerned about the ongoing political and economic turmoil in the country.
In a statement issued today, Moody’s Investor Service and Fitch Ratings said that they expect the International Monetary Fund (IMF) to provide Pakistan with a USD 1.2 billion bailout.
It is anticipated that pressure on the country’s currency and forex reserves will ease once the deal amount is secured.
Bloomberg reported on Wednesday that Krisjanis Krustins, a Hong Kong-based director at Fitch, expected the IMF board to approve Pakistan’s new staff-level agreement with the lender. The IMF and other multilateral and bilateral sources may well provide additional financing, as well as boosting market confidence.” (ANI).