Dollar Pakistan Rupee Exchange Rate Today – A cashier counts Pakistani rupee notes while preparing to exchange US dollars in Islamabad, Pakistan on December 11, 2017. /Karen Feroze/File photo
KARACHI, Pakistan, Jan 26 () – The Pakistani rupee fell 9.6% against the dollar on Thursday, central bank data showed – the biggest one-day drop in two decades – which could prompt the International Monetary Fund to resume lending. to the world
Dollar Pakistan Rupee Exchange Rate Today
The drop came a day after foreign exchange firms lifted caps on foreign exchange rates, a key demand of the IMF as part of an economic recovery plan agreed to in the troubled South Asian country.
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The currency’s official exchange rate closed at 255.4 against the dollar against 230.9 on Wednesday, the central bank said.
Facing a severe payments crisis, Pakistan is desperate for foreign exchange, with less than three weeks worth of foreign reserves, which have fallen from $993 to $360.
Pakistan received $6 billion from the IMF in 2019. Another $1 billion was disbursed last year to help the country after its worst floods, but the IMF suspended disbursements in November due to Pakistan’s failure to make progress on economic reforms.
The lender announced on Thursday that it is sending a delegation to the country by the end of January to discuss starting the project.
Pakistani Rupee Slumps To Another All Time Low Of Rs230 Against Us Dollar
In addition to demanding that governments take fiscal measures, the IMF is pushing for a move toward a market-based monetary system, the IMF revealed in its statement on Thursday.
Companies lending foreign money for the benefit of the country lifted the ban on Wednesday, saying it was hurting the country’s economy.
Wednesday’s movements by foreign currency traders, whose market open rates differ from those announced by the central bank, affected exchange rates on Thursday.
According to Pakistani brokerage house JS Global, the fall in the official rate was the biggest since 1999 in both absolute and percentage terms.
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At the open market, the rupee fell from 243 to 262 rupees, a 7% decline, after a 1.2% drop the previous day, according to Exchange Companies Association of Pakistan (ECAP) trading data.
“We have asked the central bank to raise bank interest (rates) to fight the market,” ECAP chairman Malik Bostan said.
The State Bank of Pakistan (SBP) and the Finance Ministry did not respond to requests for comment.
Finance Minister Ishaq Dar’s efforts to protect the rupee since his inauguration in September, including intervention in the currency market, have gone against the advice of the IMF.
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The Pakistan Stock Exchange, however, fared better on the rupee’s decline, with the KSE 100 index climbing over 1,000, or 2.5%.
Tahir Abbas, head of research at Arif Habib Limited, said, “The depreciation of the rupee removes uncertainty about the future economic direction and the resumption of the IMF program, which the market is responding to.”
Topline Securities, a Karachi-based brokerage house, said foreign exchange fell from $8 billion in September to $4.6 billion by January 13, widening the gap between official and open market prices and creating a black hole. Dollar market due to lack of money.
Banks were hit hard by the sudden drop in prices. According to two executives from commercial banks operating in Pakistan, banks that were earlier borrowing at 230 dollars to the dollar to pay through open positions will now have to pay a fee of 250 rupees.
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Officials, speaking on condition of anonymity, said the banks that were hit the hardest did not have enough cash in dollars.
The decision raises the prospect of IMF funding resuming, while Pakistan, reeling from decades of high inflation, is now feared to be in a state of collapse. Most of Pakistan’s major imports, including fuel, are denominated in dollars.
“This will give a big boost to higher prices in the economy,” said Pakistani macroeconomist Saqib Sherani, adding that the Consumer Price Index (CPI) was hitting unprecedented levels in the country.
Inflation averaged 25% in the first quarter of this financial year ending in June. The central bank is also tightening monetary policy significantly, interest rates are once again at decade highs, and growth has nearly stalled.
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Economic instability will also cause problems for the government, former Prime Minister Imran Khan wants elections to be held as soon as possible.
Reporting by Ariba Shahid in Karachi and Asif Shahzad in Islamabad; The Writings of Gibran Pesimam; Edited by Muralikumar Anantharaman, Sri Navaratnam and Simon Cameron-Moore
Ariba Shahid is a journalist based in Karachi, Pakistan. It primarily covers economic and financial news from Pakistan, as well as Karachi-centric issues. Ariba has previously worked for DealStreetAsia and Profit Magazine. Pakistan is currently grappling with the global financial crisis with a sharp drop in foreign exchange [File: BK Bangash/AP Photo]
Pakistan’s rupee has fallen to a record low against the US dollar after the exchange rate cap was lifted as the cash-strapped country looks to unlock a key bailout from the IMF.
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The Washington-based lender has yet to approve the issuance of the $1.1bn bond, which was first issued in November last year as part of a $600bn bond secured in 2019.
Talks with the IMF on reviving the bailout have been stalled for the past few months, as the organization wants to move ahead with financial integration and restructuring the country’s economy.
On Wednesday, the rupee closed at 230 against the US dollar. It fell further, trading at 255 for $1 at the market open on Thursday. Hours later, the Central Bank of Pakistan confirmed that the currency had depreciated by 9.6 percent against the US dollar after the removal of government-imposed tariffs but this was disputed by the IMF.
Malik Bostan, an economic expert, told the Associated Press news agency that the rupiah’s value had fallen significantly due to the delay in reviving the IMF’s bailout talks due to the foreign exchange freeze, but he expected it to stabilize as talks resumed.
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On Thursday, an IMF official said the IMF visionary would visit Pakistan later this month to discuss the ninth annual review of the country’s financial system.
“At the request of officials, a personal mission of the Fund will visit Islamabad on January 31 – February 9 to continue discussions”, Esther Perez Ruiz told Reuters news agency.
A successful visit is crucial for Pakistan, which is facing a severe cash flow crisis and is desperate for foreign exchange, with less than three weeks of foreign payments in its foreign reserves.
International support and assurances of bilateral efforts to rebuild Pakistan after last year’s devastating floods have also been linked to the country’s green light from the IMF.
Pakistani Rupee Loses Ground Against Major Currencies Despite Stability Against Us Dollar
This week, Prime Minister Shahbaz Sharif said his government was ready to abide by the “tough conditions” of funding to revive the $600 million package, which will be increased by a billion in 2020.
Sharif has been struggling to improve the country’s economy since taking office last year, blaming former prime minister Imran Khan and his government for the poor economy. Khan was removed from office in April 2022 by a confidence vote and has since been campaigning for early elections.
Thousands of shipping containers filled with industrial, food and medical supplies have been stored at Karachi port as banks have refused to guarantee foreign exchange to importers.
Pakistan faced nationwide power outages earlier this week, linked to cost-cutting measures, estimated to have cost the textile industry alone $70m. Let the market open and the rupee-dollar exchange rate fall to its real value.
Pakistan Rupee Plunges To All Time Low Against Us Dollar
According to reports, the Pakistani rupee may depreciate to gray market levels in a few days.
The black market price of the local currency is currently between Rs 250 and Rs 260 to the US dollar, though traders had pegged the currency at Rs 238 till Tuesday.
“The organization has decided to remove the dollar-dollar exchange rate cap,” Exchange Company Association of Pakistan (ECAP) president Malik Bostan said in audio and video messages after a Zoom meeting on Tuesday.
“This decision will end the black money market, increase the flow of foreign exchange to traders and provide access to people (for travel abroad, education and hospital payments, etc.).”
Today Open Market Currency Rates In Pakistan
He said that traders have voluntarily decided to limit the exchange rate in the interest of the country. But the decision appeared to have the worst impact on the country in the subprime money market.
“People were buying dollars (Rs 238) in the open market and selling them in the black market (Rs 250-260), making it a profitable business,” he said, adding that no one came to traders’ counters to sell foreign currency. Which made the conditions stricter here
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