[vc_row][vc_column][vc_column_text dp_text_size=”size-4″]On the interbank market on Thursday, the Pakistani rupee plunged drastically by Rs18.74 versus the dollar, reaching a record high of Rs284.85 in morning trade, according to information provided by the Exchange Companies Association of Pakistan (Ecap).
Experts blamed the government’s standoff with the International Monetary Fund for the record loss, which is 7.04 percent (IMF).
According to SBP data, the PKR closed Wednesday at Rs266.11 per USD.
Interbank closing #ExchangeRate for todayhttps://t.co/yixJmUnrgF pic.twitter.com/PWg8EoDAgM
— SBP (@StateBank_Pak) March 1, 2023
Mohammed Sohail, chief executive of Topline Securities, stated that the recent decline was mostly caused by a lack of confidence in the currency market due to the IMF’s delayed funding.
The Exchange Companies Association of Pakistan’s (ECAP) secretary general, Zafar Paracha, revealed that the IMF had ordered Pakistan to trade dollars at the going rate for commerce with Afghanistan.
In other words, they had stated that rather than the interbank rate or the open market, our true rate should be the grey market rate. They are correct since the only location where trading in dollars now occurs is on the black market, he continued.
He claimed that because of restrictions put in place by the government on foreign exchange, trading moved to the black market.
The numerous limitations they have placed on foreign exchange companies regarding the buying and selling of the dollar, he claimed, prevent the currency from rising or falling.
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He claimed that despite government crackdowns [on the grey market], this is still the case. Asserting that carrying out crackdowns would not help, Paracha urged for a revision of the policies.
“Unintentionally, our policies have substantially aided the grey market. The IMF is aware of this as well, and has advised us to get our exchange rate between the rupee and the dollar to that level,” he continued.
“The IMF demanded a 20 percent fall in the rupee’s value before the new deal that was accomplished,” said Komal Mansoor, Head of Strategic Planning at Tresmark.
Expressing her expectation that the currency will ultimately stabilise between Rs278 and Rs280. “The State Bank would interfere if it rose above this.”
That, according to Mansoor, is what’s causing the recent spike in the dollar rate. “We anticipate that the market will set below Rs 280 and that the rupee won’t weaken any further.”[/vc_column_text][/vc_column][/vc_row]
