Rupee depreciates 49 paisas against dollar as IMF talks continue

KARACHI: The rupee lost another 49 paisas against the dollar on Wednesday, as the government is set to accept harsh International Monetary Fund (IMF) conditions in the ongoing talks, dealers said.

The local currency ended at Rs230.89 against the greenback from the previous day’s closing of Rs230.40 in the interbank foreign exchange market.

The dealers said the rupee came under pressure because the market participants believe that the government would accept the IMF’s harsh conditions to continue the loan programme.

Reportedly, the Pakistani authorities and the IMF representatives met for the second day on Wednesday to continue talks for the resumption of the loan programme under the Extended Fund Facility (EFF).

The IMF is demanding the authorities to allow market-based currency rates. Recently, former finance minister Hafeez Pasha claimed that the government had capped the dollar rate to control the exchange rate. The actual dollar rate is Rs295.

Further, the dealers said the rupee remained under pressure during the day due to higher dollar demand after the State Bank of Pakistan (SBP) allowed relaxation on imports.

The SBP advised the banks to provide a one-time facilitation to all those importers who could either extend their payment terms to 180 days (or beyond) or arrange funds from abroad to settle their pending import payments.

“Accordingly, till March 31, 2023, the banks have been advised to process and release the documents of shipments and goods that had already arrived at a port in Pakistan or have been shipped on or before January 18, 2023,” the SBP added.

However, the dealers said the hike in the interest rate has failed to support the local currency. The rupee fell to the all-time low level of Rs239.94 against the dollar on July 28, 2022.