PKR interbank rate weakens by Rs2 due to uncertainty surrounding IMF program

On Monday, the Pakistani rupee faced a decline due to uncertainty around the revival of the IMF program and a lack of confidence in the government.

At 11:57am, the rupee was valued at Rs283.7 per dollar, representing a depreciation of Rs1.99 or 0.71% from the previous Friday.

The delay in the signing of the IMF staff-level agreement and the absence of reassurances from friendly countries to fund a balance of payment gap have contributed to the lack of confidence in the government.

The rupee is expected to appreciate once the IMF loan program is revived, and higher inflows are expected during Ramadan. The smuggling of dollars from Afghanistan has also led to a shortage of dollars in the market.

The delay in the IMF agreement has raised concerns about Pakistan’s ability to avoid default, as the IMF has asked Pakistan to arrange $7bn for debt servicing during the current fiscal year before releasing the $1.1bn tranche.