(MENAFN- Khaleej Times) Traders in general and investors in particular will adopt a ‘cautious approach’ about the rupee and wait for clear direction on political and economic fronts In the open market, the UAE dirham was exchanging hands at Rs53.5 and Rs54.1 for buying and selling counters, respectively. — File photo by Muzaffar Rizvi
Published: Sun 5 Jun 2022, 5:19 PM
Last updated: Sun 5 Jun 2022, 5:21 PM
The Pakistani rupee is expected to remain under pressure this week ahead of federal budget to be announced on June 10, experts say.
The local currency of South Asian nation consolidated its gains last week but closed on negative note by losing 33 paisas against the US dollar in the interbank trading on Friday and closed at Rs197.92 (53.92 against the UAE dirham) against the previous day’s closing of Rs197.59 (53.83 against the dirham).
In the open market, the UAE dirham was exchanging hands at Rs53.5 and Rs54.1 for buying and selling counters, respectively.
Traders in general and investors in particular will adopt a ‘cautious approach’ about the rupee and wait for clear direction on political and economic fronts as the government is ready to table the finance bill in the National Assembly on Friday.
“The market is also awaiting progress on talks with the International Monetary Fund (IMF) following the Pakistan government’s two back-to-back hike in fuel prices to meet the fund’s loan conditions,” according to an analyst.
Pakistan is expected to sign a staff-level agreement with the IMF in June to revive a $6 billion extended fund facility. Forex dealers said the dollar selling by exporters also supported the local currency last week but it failed to sustain the trend after a sharp decline in the foreign currency reserves, which dropped below $10 billion.
“The foreign exchange decreased by $366 million in the week ended May 27 to stand at $9.72 billion,” the central bank said in a statement on its website Thursday.
Analysts said the country’s reserves dropped roughly a 50 per cent from August and enough to pay for less than two months of imports.
“The shortage of US dollars will persist and may worsen as the trade deficit will widen to a record $45 billion in the year ending June,” a market trader said, and adding that the widening current-account deficit is also a source of concern for policy makers and IMF officials.
Last week, Moody’s Investors Service also downgraded its outlook on Pakistan to negative from stable on concerns, including a delay in the revival of the IMF loan programme.
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