Traders expect the Pakistani rupee to weaken further in the coming week owing to a sharp decline in foreign exchange reserves brought on by fresh repayments of external debt.Traders say this is causing concern for investors who are worried about how the country's economic situation will develop.We expect the rupee to depreciate much further during the course of the upcoming week due to declining foreign reserves and repayment of foreign loans.
Any developments on the IMF (International Monetary Fund) front are being eagerly watched by the market,& a forex trader said.The local currency closed at 226.94 against the US dollar on Monday while it ended the week at 227.14 against the dollar on Friday.Pakistan paid back $600 million to the Emirates NBD Bank and $420 million to the Dubai Islamic Bank, causing the State Bank of Pakistan's (SBP) reserves to fall to a critically low level of $4.5 billion.The coming week is turning out to be significant for Pakistan's economy as a donors& conference is set to begin on Monday, January 9, which will be led by the US in partnership with Pakistan to garner support for post-flood aid, according to Geo TV.Currently, Pakistan's chief of army staff is visiting Saudi Arabia and the United Arab Emirates.
Experts have said &no one is second guessing what this trip is about.Meanwhile, the delay in IMF funding of $1.1 billion has made Pakistan struggle to allay default fears.Islamabad and the IMF differ over a review of policy and reforms the Fund is requiring in the country.
The IMF's programe review was supposed to be finished in November, Geo TV reported.The IMF programe is connected to another essential foreign financing, making it difficult for the country to meet its external funding requirements.
Up until June, they amounted to more than $30 billion and included imports, especially energy, and debt repayments.The decline in the forex reserves put pressure on the rupee owing to the government's slow progress in rolling over and securing foreign inflows from international lenders.Given that elections are slated to take place this year, the government keeps delaying the IMF's requirements out of concern for further political capital loss.The local currency has lost 28.3% of its value against the dollar in 2022.Finance Minister Ishaq Dar has assured that the government would complete the IMF programe.The post Traders expect Pakistan's Rupee to lose ground in coming week first appeared on Ariana News.