Staff Report
ISLAMABAD: The US dollar appreciated by more than Rs2 in the interbank market on Monday to cross the Rs200 mark, with analysts forecasting that the rupee would continue to fall as outflows for oil payments and other imports persist while matters with the International Monetary Fund (IMF) are yet to be finalised.
According to the Forex Association of Pakistan (FAP), the greenback gained Rs2.25 to reach Rs200.40 against the previous close of Rs198.15. In the open market, the value of the dollar had risen to Rs200 at noon.
Paracha also claimed that banks were manipulating the dollar’s rate, contributing to the decline in the local currency’s value.
Former treasury head at Chase Manhattan, Asad Rizvi, told Mettis Global — a web-based financial data and analytics portal — that the conditions would remain choppy until the budget and the approval of the IMF for the resumption of its loan facility for Pakistan.
Moreover, he said, “Moody’s on Thursday downgraded Pakistan’s economy’s outlook from stable to negative due to the external financing factor, and the market reaction saw the PKR dipping. Closure of market in the Middle East also added pressure.”
Mettis Global director Saad Bin Naseer further explained that outflows on account of external debt repayments and imports amid uncertainty surrounding inflows from the IMF and the other bilateral agreements had caused the rupee to lose value against the dollar.
“However, any official announcement from the IMF or other bilateral countries could help stabilise the exchange rate parity,” he told media.
According to Komal Mansoor, head of research at Tresmark, “there is a backlog of outflows in the market which need to be settled before June end, including dividend repatriation and debt repayments.
“This will continue to exert pressure on the local currency for the next few weeks,” she said.
