October 9, 2018 (MLN): The rupee value against dollar has plummeted by around PKR 9.37 per USD at the interbank market following the government’s announcement to approach the International Monetary Fund (IMF) for a bailout, given that at least 15% currency devaluation is a prerequisite for the IMF rescue package.
The rupee value has altogether depreciated by 7.54%, closing in at PKR 133.64 per USD as compared to yesterday’s closing value of PKR 124.27 per USD.
Since December 2017, this is the 5th currency devaluation by the State Bank of Pakistan (SBP), and the 13th IMF bailout since 1988.
As per official SBP data, foreign reserves during the week ending September 28 were just enough to cover two months’ worth of imports, having dropped down to $8.5 billion, which is a cause for concern, in addition to increasing current account deficit and fiscal deficit.
According to Finance Minister Asad Umer, Pakistan needs $8 billion by December 2018 to make external debt payments.
As the picture gained clarity on the issue of IMF bailout, the country’s capital markets took a sharp turn from the last six days’ losses, snapping up by around 1.6% or 606 points from yesterday’s closing value.
