KARACHI: The value of the Pakistani rupee fell sharply in interbank trading on Thursday, falling by Rs18.89 against the US dollar.
According to forex dealers, the local currency is currently trading at an all-time high of Rs285 per USD in the interbank market.
According to forex dealers, the greenback was trading at Rs290 in the open market. The local unit closed at 266.11 in the interbank the other day.
Analysts attributed the decline to the delay in signing the staff-level agreement with the International Monetary Fund (IMF), as well as the central bank’s impending policy rate hike.
New IMF conditions
The International Monetary Fund (IMF) has requested that Pakistan implement demands before reaching a staff-level agreement to restart the $7 billion Extended Fund Facility (EFF), which has been stalled for months.
Pakistan and the International Monetary Fund (IMF) are expected to make progress on the loan program’s revival on March 2 when they hold virtual talks for a staff-level agreement.
According to sources, Islamabad was constantly receiving new Memorandums of Economic and Financial Policies (MEFP), while new demands were being tabled by amending the agreement’s clauses.
According to sources, the IMF has tabled four more conditions before reaching a staff-level agreement, and the government has been forced to implement an Rs3.82 surcharge on electricity permanently rather than for four months.
Meanwhile, the lender demanded that the interest rate be raised ahead of the staff-level agreement. In this regard, the State Bank of Pakistan (SBP) pre-scheduled its Monetary Policy Committee meeting on March 2 — two weeks earlier than planned.
The lender insisted that the country’s interest rate be in line with inflation, which the incumbent government agreed to.