Most of Pakistan's critical imports, including fuel, are paid for in dollars. While the move increases the chances of a restart in IMF funding, Pakistan is also reeling from decades-high inflation, which economists fear will now get worse. The officials told Reuters on condition of anonymity that banks that were hit the hardest are those that did not have adequate dollar inflows. According to two officials in commercial banks operating in Pakistan, banks that had earlier borrowed at 230 rupees to the dollar to make payments by running open positions now have to settle payments at a rate of 250 rupees. ![]() 13 led to a widening in the spread between the official and open market rates, and created a black market for dollars due to the low supply. ![]() Topline Securities, a Karachi-based brokerage house, said the sharp fall in foreign exchange reserves from $8 billion in September to $4.6 billion as of Jan. "The depreciation in the rupee takes away some uncertainty regarding the economic roadmap ahead and resumption of the IMF programme, which the market is responding positively to," Tahir Abbass, Head of Research at Arif Habib Limited, said. ![]() The Pakistan Stock Exchange, however, reacted positively to the rupee's fall, with the KSE 100 index shooting up more than 1,000 points, or 2.5%. The State Bank of Pakistan (SBP) and the finance ministry did not respond to a Reuters request for comment.Īttempts by Finance Minister Ishaq Dar to defend the rupee since his appointment in September, including reported currency market interventions, had run counter to the IMF's advice. "We requested the central bank to increase the interbank (rate) to help combat the black market," ECAP President Malik Bostan told Reuters.
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