PKR nearing 198/USD, bottoms out by 2 rupees in intraday trade

May 18, 2022 (MLN): Melting down in a perfect storm of panic caused by uncertainty over the IMF tranche and the silence of the State Bank of Pakistan, the Pakistani rupee (PKR) has plummeted by over 2 rupees in the intraday trade against the greenback.

The rupee was quoted at 197.50/ 197.90 (10:56 PST) against the previous day’s close of PKR 195.74 per USD.

Meanwhile, within the open market, PKR was traded at 198/200 per USD.

Higher demand for the dollar in the market on the back of soaring import bill, depleting reserves, and the absence of timely measures taken by authorities has kept the local currency under pressure.

Experts are of the view that the government has to take tough economic decisions pertaining to IMF requirements for the revival of the package otherwise, the country will have to bear irreparable losses.

The talks between Pakistan and the International Monetary Fund (IMF) have started today for a week to discuss the release of the remaining $1 billion tranche under the Extended Fund Facility (EFF).

key concerns will be the increase in revenue collections and the removal of subsidies on petrol and electricity.

To note, IMF emphasized the need to reverse the unfunded subsidies which are the prior conditions for the ongoing $6 billion loan program. The government had assured the fund that it will increase the prices of petroleum products to fulfill this commitment.

Despite the assurance, the incumbent government has not increased the prices of petroleum products yet, apparently due to possible political backlash.

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