Rupee slips against dollar on IMF programme delay fears

KARACHI: The rupee slipped Rs1.58 against the dollar on Tuesday, owing to the fears of a delay in the loan programme under the International Monetary Fund (IMF), dealers said.

The rupee ended at Rs261.50 against the greenback from the previous day’s closing of Rs259.92 in the interbank foreign exchange market.

The dealers said the reports of a delay in the IMF programme badly affected the market sentiments. However, the State Bank of Pakistan (SBP) has convened a Monetary Policy Committee (MPC) ahead of schedule to fulfil one of the IMF conditions to finalise the staff-level agreement.

The SBP announced that the meeting of the Monetary Policy Committee would be held on March 2, 2022, which was actually scheduled for March 16, 2023.

Reports said the central bank may announce an aggressive increase in the policy rate from the existing 17 per cent.

The local currency recorded a historic low of Rs276.58 against the dollar on February 3, 2023.

The country’s foreign exchange reserves depleted sharply during the last one year and presently at an alarming level. However, in the last two weeks, the official forex reserves slightly increased, giving some breathing space to the local currency.

The official foreign exchange reserves of the SBP increased $65 million to $3.258 billion by the week ended February 17, 2023, compared with $3.193 billion a week ago.

The current level of the official foreign exchange reserves are only to provide import cover for around two weeks, or 19 days.

The import bill for January 2023 has been recorded at $4.856 billion, as per the Pakistan Bureau of Statistics (PBS). The benchmark foreign exchange reserves of a central bank should be at a level to provide three months of import cover.

The official foreign exchange reserves of the central bank fell sharply to an almost nine-year low. Previously, the official forex reserves of the SBP were seen at $3.19 billion in February 2014.

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