Monitoring Desk
ISLAMABAD/KARACHI: As the International Monetary Fund (IMF) continues to hold back the release of around $1.6 billion tranche of the $6 billion bailout package secured by Pakistan, the local currency plunged by Rs18.89 against the US dollar in the interbank market on Thursday.
Market is also reacting to the expected rise in discount rate by State Bank whose Monetary Policy Committee (MPC) is meeting mid-day today. There were rumors that interest rate will see a jack up by at least 2% (200 basis points).
In over two decades, this is the most significant one-day drop of the local currency against the US dollar.On Thursday, the greenback was trading at Rs285 against the local currency at around 10:45 am.
The Pakistani rupee closed at Rs266.11 against the dollar on Wednesday. Within three days, the US dollar appreciated a massive Rs26 against the local currency.
Interbank closing #ExchangeRate for todayhttps://t.co/yixJmUnrgF pic.twitter.com/PWg8EoDAgM
— SBP (@StateBank_Pak) March 1, 2023
The drop comes a day as the IMF held back the expected tranche of $1.50 billion to the cash-strapped South Asian nation.
With an acute balance of payments crisis, Pakistan was desperate to secure external financing, with less than three weeks’ worth of import cover in its foreign exchange reserves, around $3.6 billion.
The IMF suspended disbursements of the secured amount to Pakistan in November last November after it failed to make more progress on fiscal consolidation.
