Rupee drops against dollar in inter-bank market
The rupee dropped by Rs2.32 against the dollar in the inter-bank market on Monday as uncertainty over the staff-level agreement with the International Monetary Fund continues.
The local currency closed at Rs284.03 after depreciating by 0.82%, the State Bank of Pakistan reported. Experts have blamed the delay in the deal with the IMF for the fall in the rupee’s value.
They have maintained that the currency would bounce back after the country and the lender reach an agreement. Pakistan needs funding from the international lender to boost its economy and pave way for loans from friendly countries and other donors.
Pakistan desperately needs more than $1 billion to shore up its tottering economy. The Dar-led finance ministry has taken several measures to win the loan from the stalled prorgamme. But, the country still awaits the funds to welcome inflows from friendly countries and other international donors.
So far, China has only rolled over the loan and supported the cash-strapped country. The inflow brought Pakistan’s reserves to $4.3 billion, however, experts believe that the lack of structural reforms and rupee devaluation was affecting the economy.
“During the seventh and eighth reviews, the members of friendly countries, who are also part of the executive board of IMF, had assured the country of additional deposits and investment. Both of them have not been materialised,” economic expert Mehtab Haider told Dunya News last week.
He was responding to the IMF’s requirement of materialising external financing committed by certain friendly countries.
“This is also an issue of the credibility of IMF, which says that if we revive the programme and despite that, if Pakistan does not get the financing it might lead them towards default. But Pakistan has maintained that for the balance of payment, they will go towards IMF, who also have the responsibility to arrange this financing,” he said.
Haider added that the blame was being shifted on each other. But the lender has “clearly told Pakistan that the ball was in their court,” he claimed while speaking about the last meeting of the government with the IMF.
“You had made commitments with our board. Materialise them and when they are done we will sign a staff-level agreement,” he said and gave an example of Sri Lanka whose deal was signed after China, India, and the Paris Club completed their financing requirements.
Haider was of the view that it was the responsibility of the IMF and Pakistan to arrange this financing.
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