The Pakistani rupee fell slightly against the greenback on Thursday, staying around the 219 level in the interbank market.
During intra-day trade, the rupee was quoted at 218.99, a depreciation of 0.61paisas or 0.27 percent against the US dollar.
The rupee fell against the US dollar for the third consecutive session on Wednesday, closing at 218.38, down Re0.72 or 0.33 percent.
— SBP (@StateBank_Pak) August 24, 2022
The drop is reported regardless of the news that the Qatar Investment Authority, one of the world’s largest sovereign funds, is considering investing $3 billion in Pakistan, bolstering the cash-strapped economy of the South Asian country.
Meanwhile, oil prices, a crucial driver of currency parity, climbed on Thursday on mounting supply tightness concerns amid disruptions to Russian exports, the potential for major producers to cut output, and the partial shutdown of a US refinery.
According to field experts, the rupee will continue under pressure until the IMF board authorizes Pakistan’s $1.17 billion tranche payment. The country’s soaring inflation, expanding trade deficit, and declining foreign exchange reserves are exerting enormous pressure on the local currency.
In addition, to the pressure for the global lender, government has removed the months-long restriction on the import of luxury goods, and exports have not grown at the expected rate, putting pressure on the rupee.
However, Acting Governor of the State Bank of Pakistan, Murtaza Syed, told Bloomberg TV that Pakistan is likely to receive a $1.17 billion loan tranche from the IMF within six days after the Executive Board’s approval.
He added that the country’s forex reserves will shore up to $16 billion by the end of the current fiscal year 2022-23 which dropped to $8 billion due to delay in the revival of the IMF loan programme and external flows.
Following the IMF loan, experts believe that Pakistan would receive additional funding from multilateral and bilateral organizations, providing a significant boost to the country’s depleted foreign reserves.