Karachi July 19 2022: Pakistan rupee continue to drop against the dollar and closes at 221.99 in the interbank as Fitch revises Pakistan outlook to negative from stable amid increase in political tension despite Pakistan reaches staff level agreement with IMF for release of $1.17 billion under 7th and 8th review of Extended Fund Facility.
Ratings agency Fitch on Tuesday revised its outlook on Pakistan to negative from stable, citing deterioration in country’s external liquidity position and financing conditions since early 2022.
Fitch affirmed Pakistan’s Long-Term Foreign-Currency (LTFC) Issuer Default Rating (IDR) at ‘B-‘.
Pakistan dollar bonds due in April 2024 were indicated 11.1 cents lower at 56.26 per dollar, according to Bloomberg.
The Pakistan Tehreek-i-Insaf on Sunday routed the PML-N by winning at least 15 seats in the crucial by-elections on 20 seats that got vacated after the disqualification of PTI members who had voted for Hamza Shehbaz for Punjab chief minister’s office.
The Rupee lost nearly 3.1% or 6.79 to close the day at 221.99 in the interbank. This is the second highest daily drop in Pakistan’s history after Rupee decline of 9.38 on 9th October 2018.
On last trading day, Rupee closes at Rs 215.2 in the interbank market which was the all time low hit by Pakistani Rupee.
While Dollar in open market up by Rs 8 to trade at 224.50 and in last two sessions dollar gained Rs 12.50 in open market.
The ruling PML-N could win only four seats, as it had fielded turncoats in all the constituencies, except one of Lahore, where PTI renegade Aleem Khan had decided against contesting the by-election.
Former PML-Q federal minister Moonis Elahi says that PML-N’s defeat was actually Pakistan’s victory. He stated Punjab had come out of Sharif family’s slavery by breaking all shackles.
“The real process of change will begin now and Punjab as well as Pakistan will progress leaps and bounds under the leadership of Imran Khan,” he asserted.
On 14th July 2022, Pakistan secured desperately needed approval from IMF staff level team. An International Monetary Fund (IMF) team, led by Nathan Porter, has finalized discussions for the combined seventh and eight reviews of Pakistan’s economic program supported by an IMF Extended Fund Facility (EFF).
“The IMF team has reached a staff-level agreement (SLA) with the Pakistan authorities for the conclusion of the combined seventh and eight reviews of the EFF-supported program. The agreement is subject to approval by the IMF’s Executive Board. Subject to Board approval, about $1,177 million (SDR 894 million) will become available, bringing total disbursements under the program to about $4.2 billion. Additionally, in order to support program implementation and meet the higher financing needs in FY23, as well as catalyze additional financing, the IMF Board will consider an extension of the EFF until end-June 2023 and an augmentation of access by SDR 720 million that will bring the total access under the EFF to about US$7 billion.” Says IMF press release.
