The US dollar continued to extend gains on Wednesday as it touched another record high of over Rs 206 amid rising demand for the international currency and easing inflows, while loans of $6 billion with the International Monetary Fund (IMF) Talks were held on restarting. The program remains inconclusive.
update from Metis Global A web-based financial data and analytics portal – showed that the greenback gained Rs 1.25 from the previous day’s Rs 205.25 and touched Rs 206.50 as of 11:40 pm. The closing rate of the FAP shows a slight difference from the closing rate of State Bank of Pakistan, which posted a closing rate of Rs 205.16.
Metis Global Director Saad bin Nasser outlined the resumption of the IMF program and the delay in the ongoing plenary sessions of the Financial Action Task Force (FATF) – which will decide whether Pakistan needs the body to make up for deficiencies in its counter-terrorism financing. Whether or not to stay on the gray list and the anti-money laundering regime – as two main factors that are keeping the rupee under pressure.
The plenary meeting of the FATF is currently underway and will conclude on June 17.
The IMF loan facility has been stalled since early April as talks with international moneylenders are inconclusive, with the lender earlier expressing reservations on fuel and energy subsidies introduced by the previous PTI government and now aiming at the new government for the upcoming financial year. Feather. year.
Pakistan signed a 39-month, $6bn Extended Fund Facility with the IMF in July 2019, but the fund halted distribution of nearly $3bn after the previous government reneged on its commitments and announced fuel and energy subsidies .
Esther Perez Ruiz, representative of the IMF in Islamabad, Told On Monday, additional measures would be needed to bring Pakistan’s budget for the year 2022-23 in line with the key objectives of its program with the IMF.
today one dawn report good A source in Washington was quoted as saying that the IMF also has “concerns about governance and corruption” and that it “would not like to be associated with any program open to corruption”.
Such factors have been considered as impediments to the IMF’s credit facility, which is expected to ease the pressure on the rupee once it resumes.
According to Malik Boston, chairperson of the Forex Association of Pakistan, the delay in restarting the facility is causing the rupee to depreciate day by day.
Meanwhile, he said, Pakistan was still awaiting the rollover of the $2.3 billion loan from China and this was putting the rupee under further pressure.
Boston has speculated that the rupee may remain down till June 30, but added that there could be some stability in the rupee if Pakistan is removed from the FATF gray list after the end of its four-day plenary session on June 18. can be seen.
Rise in crude oil prices
Apart from the reasons mentioned above, Naseer identified the rise in crude oil prices in the international market as another factor behind the dollar’s climb.
“Rise in international crude oil prices (Brent at $121.5 per barrel and West Texas Intermediate at $119.3 per barrel) during the previous session further fueled demand for the dollar,” he explained.
Meanwhile, Naseer said, the exporters were “keeping their earnings outside the country to take advantage of the exchange rate. State Bank of Pakistan and the concerned authorities were in time to compel the exporters to bring back their export proceeds in the country.” Action needs to be taken. Shore the forex reserves”.