PKR plunges by Rs4.5 in interbank market

The Pakistani rupee’s value declined sharply in the interbank market on Wednesday, with the local currency trading at Rs265 per dollar around 1pm, according to data shared by the Exchange Companies Association of Pakistan (Ecap).

This equates to a depreciation of 1.72 per cent from yesterday’s close of Rs261.5 a dollar.

Ecap Secretary General Zafar Paracha attributed the rupee’s depreciation to the delay the agreement with the International Monetary Fund (IMF) for an economic bailout.

“The rupee and the economy are both under pressure again and the main reason is the delay and new conditions by the IMF.”

Director of financial data and analytics portal, Mettis Global, Saad bin Naseer also shared the same view.

“The market was calm in February and [the rupee] appreciated 2.7pc. There was anticipation that an IMF deal would be in soon. However, due to the delay in the IMF agreement and a higher open market rate in Afghanistan — Rs285-290 a dollar — the rupee’s value is declining.”

He said the government should take strict action against those involved in illegal buying and selling of dollars and fulfil the IMF’s conditions as soon as possible to avoid further panic.

“Once the deal is through, you will see the USD fall below the Rs260 level,” he added.

Tresmark’s Head of Strategy Komal Mansoor said there were a number of factors behind the rupee’s depreciation, the most important of which was that negotiations with the IMF have so far not led to a staff-level agreement.