Rupee falls against the dollar for the tenth session in a row.
In addition to the loans that were anticipated from international and bilateral institutions, the Pakistani rupee resumed its downward trend on Thursday, falling against the dollar for the tenth straight day.
The rupee lost Rs1.68 in intraday activity on the interbank market, falling to Rs236 from its previous close of Rs234.32 against the dollar.
Following guarantees from friendly nations like Saudi Arabia and the United Arab Emirates, the International Monetary Fund (IMF) gave Pakistan the urgently required $1.17 billion rescue package.
The local unit is still under strain, nevertheless, as friendly nations and financial institutions have yet to offer the much-needed financial assistance.
Dr. Khaqan Hassan Najeeb, an economist and former consultant to the federal ministry of finance, outlined a variety of factors that contributed to the rupee’s ongoing slide.
He said that the uncontrolled movement of the rupee was caused by the smuggling of dollars, an increase in the trade deficit, delays in receiving payments from allies, and increased dollar import requirements as a result of the floods.
Economic damages from floods are predicted to exceed $30 billion, and it will likely take several months to fully restore millions of people’s lives.
In addition to the floods, which even overshadowed the IMF program’s rebirth, the nation is currently experiencing political turmoil, which has kept investors on their toes.
Pakistan has experienced ongoing political unrest ever since Imran Khan’s administration was overthrown in April. Investors have a number of reservations regarding the current government’s policies notwithstanding the passage of months.
According to Zafar Paracha, general secretary of the Exchange Companies Association of Pakistan (ECAP), it is crucial that all parties get together to discuss and find solutions to Pakistan’s problems.
The ECAP representative stated that it was anticipated that the rupee would appreciate against the dollar once the International Monetary Fund (IMF) loan came in, and it did as it increased by Rs2.
But despite receiving funding from the international lender, the government did not receive funding from multilateral and bilateral organisations, he pointed out, therefore the decline has continued ever since with just tiny increases.
According to Paracha, the World Bank, the Asian Development Bank, and friendly nations like Saudi Arabia, the United Arab Emirates, and Qatar are still hesitant to lend money to and make investments in Pakistan.
The IMF’s Executive Board was about to authorise giving Pakistan the money when the PTI-led governments in Punjab and KP decided they would not comply with the IMF’s standards. Paracha cited political instability as the primary cause of this.
“Due to this, a detrimental effect was produced. Although PTI controls a sizable portion of the nation and is significant, political stability is currently needed, and the administration lacks a clear direction “He bemoaned.
