Pakistani rupee hits all-time low against dollar amid uncertainty surrounding IMF talks

ISLAMABAD: Pakistan’s national currency on Wednesday hit another historic low of Rs173.47 against the United State dollar (USD) amid uncertainty surrounding ongoing talks between officials from the IMF and Pakistan for the release of the latest tranche of a bailout package, traders and analysts said. 
In 2019, Pakistan reached an accord with the International Monetary Fund for a three-year, $6 billion bailout package aimed at shoring up fragile public finances and strengthening a slowing economy.
Pakistani and IMF officials are currently engaged in a fresh round of talks for the release of a $1 billion tranche of the loan.
The central bank said the Pakistani rupee closed up by 0.40 percent at Rs173.47 against the greenback in the interbank market as compared to Rs172.78 at the close of last week. The currency also depreciated in the open market where it was trading at Rs174 for buying and Rs174.50 for selling against the greenback, according to the Exchange Companies Association of Pakistan (ECAP). 
“The open market is following the interbank market where Pak rupee is under pressure,” ECAP general secretary Zafar Parach said. 
“There are no more sellers in the open market due to the uncertain outcome of talks with the IMF and volumes have declined substantially,” Paracha added. “The daily trading volume in the open market has declined from around $100-around to $50-60 million.” 
Analysts said the rupee was under pressure in the interbank market due to increasing imports and a plunging current account deficit.
“The demand for import payments is still high which is pushing the demand for the greenback,” Samiullah Tariq, Director Research at Pakistan Kuwait Investment, told Arab News. 
However, the stock market rebounded on Wednesday and posted 1.95 percent gains, or 45,499.46 points, at closing. 
“The market has now got an understanding that it cannot move the dollar,” Tariq said. “The dollar movement is not part and parcel of trade and there is no panic.”