Pak Rupee reaches an all-time low against the US Dollar

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Pak Rupee reaches an all-time low against the US Dollar

KARACHI: The United States (US) dollar soared against the Pakistani rupee on Monday, hitting a fresh all-time high in the interbank market. The Pakistani rupee continued to fall against the US dollar, losing another Rs 1.60 in the interbank market to settle at Rs 172.78.

According to figures issued by the State Bank of Pakistan (SBP), the rupee has depreciated 9.67 percent (or Rs15.24) from the start of the current fiscal year on July 1, 2021. According to central bank data, it has lost 13.46 percent (or Rs20.51) since reaching a recent high of Rs152.27 against the greenback on May 14, 2021.

Prime Minister Imran Khan remarked last week at the launch of the Kisan Portal that the pressure on the Pakistani rupee is only temporary and will pass shortly.

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The fundamental reason for the rise in the dollar’s value and the depreciation of the rupee, according to economists, is Pakistan’s current account deficit and the IMF’s demand for further depreciation of the rupee.

Analysts had previously forecast that the downturn would end shortly, citing the successful conclusion of talks between the IMF and Pakistan to resume a $6 billion loan program as a reason for the rupee’s stabilization at present levels.

“If policy negotiations between Pakistan and the IMF are successful during the three days from October 13 to 15, the rupee volatility would end,” Pakistan-Kuwait Investment Company Head of Research Samiullah Tariq told GEO TVHowever, if the two parties are unable to reach an agreement and the talks fail, the rupee may fall below multiple key support levels.

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PM Imran Khan has called a meeting to discuss soaring inflation, according to reports. Meanwhile, sources claim that Prime Minister Imran Khan is holding a meeting to discuss inflation and the country’s economic position. The premier is anticipated to make a big announcement addressing public relief during this meeting, according to insiders.

As per sources, the Prime Minister has established a strategy to deal with rising inflation and popular reaction to it. According to reports, he would give a briefing to the relevant authorities on his plans.

The provincial chief secretaries have also been brought on board, according to the sources, and have been directed to inform the deputy commissioners.

According to the sources, PM Khan wants swift steps made to contain growing inflation.

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Pakistan’s talks with the IMF, according to Shaukat Tarin, have not failed.

According to Shaukat Tarin, Adviser to the Prime Minister on Finance, the idea that Pakistan’s negotiations with the IMF have failed is untrue. Pakistan is still negotiating a settlement with the IMF, according to the prime minister’s adviser, who spoke exclusively to Geo News.

“It is inaccurate to say that talks with the IMF have failed,” he stated. “I usually tell it like it is, and I did the same today,” he added, explaining why the country is in such a mess. “I’ve told you about the flaws and how we’re going to remedy them.”

He stated that the finance secretary is still in Washington. The country’s economic status, according to Tarin, will improve. “Give us some time,” he continued, “and an unskilled person like me will deliver for you.” The Ministry of Finance issued a press release confirming what the prime minister’s advisor had indicated previously.

“The talks between Pakistan and the IMF are progressing well. The talks are being headed by the Secretary of the Treasury’s Finance Division in Washington, DC, while technical teams from both sides are conducting comprehensive conversations in the virtual format following the exchange of necessary data sets “It was stated. “At no point was a deadline established for the negotiations’ conclusion.”

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Despite Pakistan’s harsh steps, the IMF remains unhappy.

According to an earlier story in The News, despite Pakistan’s severe steps, the IMF remains unsatisfied, and the two sides have yet to reach a staff-level agreement.

Despite putting in a lot of effort and meeting the IMF’s toughest conditions, such as raising electricity tariffs by Rs1.39 per unit on average for baseline tariff, and raising POL prices by Rs10.49 for petrol and Rs12.44 for diesel, the IMF staff is still unhappy with the macroeconomic framework outlined in the Memorandum of Economic and Financial Policies (MEFP), and without agreement on it, the staff-level agreement will not be reached. The IMF tranche will be jeopardized as a result.

According to sources, the IMF staff has been busy crunching numbers especially on the fiscal framework, external front, and power sector, which is a concerning development.

Reconciliation on the MEFP requires exceptional knowledge, as any inclusion of incorrect or nonviable statistics could result in the IMF program being suspended. If the predictions are not reconciled, Islamabad will be unable to complete all future evaluations under the $6 billion EFF agreement. Pakistan would have to complete 12 reviews to finish the 36-month Extended Fund Arrangement, therefore 2ewfinalizing the MEFP with deft management and professional abilities is vital.

The current account deficit (CAD) is expected to be around 3% of GDP, or $9.5 billion, for the current fiscal year, according to the State Bank of Pakistan (SBP). The IMF, on the other hand, has projected the CAD to be higher than the MEFP, which would provide a clear picture, but the Fund staff is predicting it to be over 4% of GDP.

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