In the interbank market on Monday, the Pakistani rupee fell 1.30 percent (or Rs. 2.59) to a one-week low of Rs. 200.51 against the US dollar at roughly 1:45 pm, indicating yet another major decrease in a single day.
According to the State Bank of Pakistan (SBP), the rupee finished at Rs. 197.92 versus the dollar on Friday.
Taurus Securities Head of Research Mustafa Mustansir told News agency, “This is a cause of concern.”
“The drop is evident when the price of petroleum products in global markets hovers high above $120 per barrel, as Pakistan is significantly reliant on imported energy,” he noted.
Budget uncertainty, according to the analyst, has placed stress on the rupee. “IMF would consider resuming its loan program after seeing whether Pakistan has implemented prerequisite commitments in the budget,” Mustansir said.
In the 2018 budget, the government is anticipated to make financial adjustments worth Rs2 trillion by lowering spending and increasing tax revenues, he noted.
The IMF program must be restarted, according to experts, in order to stabilize foreign exchange reserves and avert a worsening of the balance of payment issue.
The reserves have been drained by nearly $7 billion in the last six months, bringing them to a catastrophic low of $9.72 billion, which is only enough to support six weeks of imports.
Earlier, the IMF stated that “Pakistan must take wide-ranging steps to repair macroeconomic stability,” implying that the program’s revival would not be easy, despite the government’s intention to raise fuel prices by 25%.
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