Monday May 29, 2023

Rupee weakens

By Our Correspondent
April 01, 2023

KARACHI: The rupee ended slightly weaker on Friday amid an increased dollar demand from importers and a decline in foreign exchange reserves, traders said.

In the interbank market, the local unit closed at 283.79 per dollar, 0.05 percent lower than Thursday’s close of 283.66. The domestic currency stayed flat in the open market. It ended at 287 per dollar, unchanged from the previous close.

“We saw some dollar demand from importers, which put pressure on the rupee. The dwindling foreign reserves weighed on the market sentiments,” said a currency dealer. “The delay in resuming the International Monetary Fund programme worried market participants,” he added.

Pakistan’s foreign exchange reserves held by the central bank dropped by $354 million or 7.7 percent to $4.24 billion in the week ending March 24. The SBP attributed the repayment of external debt to the decrease in forex reserves.

The nation's foreign exchange reserves are under increasing strain from external payments. All technical-level talks with the IMF are over, according to Finance Minister Ishaq Dar. The minister did not, however, provide a timetable for signing of the agreement. Dar reiterated during a question-and-answer session at the Senate that the IMF wanted promises made by friendly countries to be fulfilled. He reaffirmed that the nation would honour its financial commitments.

Dr Aisha Ghaus-Pasha, Minister of State for Finance, claimed that the staff-level agreement on the 9th review was taking longer than expected because the IMF wanted to independently verify promises from friendly nations like Saudi Arabia and the United Arab Emirates.