IMF Postponing Deal Made Dollar Hit a New High Of Rs. 212

Delay by IMF on the deal causes the Dollar to rise up to Pakistani Rupee 212. IMF to restart the Extended Funds Facility in Pakistan.

Per the FAP (Forex Association of Pakistan), the currency has declined by more than Rs2 versus the dollar, reaching an all-time low of Rs212 from Monday’s closing of Rs209.96. Recently, the US dollar rose sharply by Rs1.21 – a pattern that has been going on for more than a week.

As per Mettis Global, a web-based financial statistics and insights service, the rupee lost Rs6.4 in five straight periods last week.

According to Tresmark’s head of research, Komal Mansoor, the government appears to be fully reliant on IMF assistance.

Meanwhile, discussions with the IMF have been stuck since early April, with the lender previously voicing misgivings over energy and oil incentives imposed by the former PTI administration and now over objectives set by the current government for the 2018 fiscal year.

Pakistan agreed on a 39-month, $6 billion with the IMF in July 2019, however, the Fund halted disbursements of around $3 billion after the previous administration violated its agreements by announcing gasoline and energy subsidies.

Miftah Ismail, Finance Minister, expressed hope yesterday that an agreement with the IMF to restart the Extended Fund Facility (EFF) will be achieved “within one or two days.”

FAP chairman blamed the rupee’s “strain” on rapidly diminishing foreign currency reserves.

Pakistan’s savings have declined by yet another $234 million, bringing the total to a little under $15 billion. The central bank’s portion of these reserves is somewhat less than $9 billion.

Second, because of the forthcoming Haj season, the supply of the dollar is high, according to Malik Bostan, Chairman of FAP. “This year, around 400,000 Pakistanis are travelling to Haj and purchasing money. This has a negative influence on the local currency.”

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