Rupee nosedives to 239.94 against US dollar. Amid the political uncertainty in the country the Pakistani rupee continued its free fall and dropped to a record low.
According to the State Bank of Pakistan (SBP), the rupee closed at 239.94, down 3.92, or 1.63pc.
According to the Forex Association of Pakistan (FAP), the rupee lost 4.48, or 1.89 per cent, compared to yesterday’s close of 236.02 by 12:03pm.
Interbank closing #ExchangeRate for todayhttps://t.co/3HKHwEmKLf pic.twitter.com/OZl2VqDeLR
— SBP (@StateBank_Pak) July 28, 2022
As per the economic experts, the downfall of Pakistani rupee against the US dollar is due to the political uncertainty in the country.
Political uncertainty has dragged the local unit to historic low against the foreign currency.
Read more: Rupee continues slide, reaches Rs229.87 against dollar in interbank
However, Moody’s Investors Service and Fitch Ratings said they expect Pakistan to secure the $1.2 billion bailout from the International Monetary Fund (IMF), which may help ease pressure on the country’s currency and forex reserves.
“We assume IMF board approval of Pakistan’s new staff-level agreement” with the lender, said Krisjanis Krustins, a Hong Kong-based director at Fitch told Bloomberg.
“This will unlock significant additional financing from the IMF and other multilateral and bilateral sources and may well provide a significant confidence boost to the markets.”
While Fitch & Moody’s expect IMF to disburse funds to Pakistan in third quarter. Pakistan is expected to receive $1.2 billion from the International Monetary Fund, which may help alleviate strain on the country’s currency and bonds, according to Fitch Ratings and Moody’s Investor Service, Bloomberg reported on Wednesday.
“We assume IMF board approval of Pakistan’s new staff-level agreement,” said Krisjanis Krustins, a Hong Kong-based Fitch director. “This will unlock significant additional financing from the IMF and other multilateral and bilateral sources, as well as provide a significant boost to market confidence.”
Pakistan’s rupee has fallen more than its peers in frontier markets such as dong and togrog.
Pakistan’s currency and bonds have taken a beating this month, as investors are concerned that political turmoil will delay IMF support for the country. The nation is trying hard to prevent fears it will follow Sri Lanka into a default this year, with the government working to secure billions of dollars from the Washington-based lender and countries like China and Saudi Arabia.
