Karachi October 17 2022: Pakistan Rupee falls for the fourth consecutive day in interbank trading against dollar as government call for rescheduling of $27 Billion debt creates doubts over fulfillment of external financing amid start of opening LCs and country’s reserves at low of three years.
This time the pace of Rupee fall is much lower than earlier depreciations as Pakistan Rupee has fallen just 47 paisa or 0.22 percent in last three sessions.
Pakistan’s new finance minister, Ishaq Dar, told Reuters on Friday that he will seek rescheduling of some $27 billion worth of non-Paris Club debt largely owed to China, but will not pursue haircuts as part of any restructuring. The veteran finance minister said multilateral development banks and international donors have been “quite flexible” with ways to meet Pakistan’s external financing needs estimated at about $32 billion after devastating floods.
Finance minister declined to comment when asked whether he thought it would be difficult to persuade China, creditor for about $23 billion of the debt, to participate.
SBP foreign exchange reserves for the week ending October 7 2022, were decreased by USD 303 million to USD 7,596 million due to external debt repayments, which included repayment of a commercial loan and interest payment on Eurobonds, as per data released by the Central Bank.
Pakistan reserves witnessed second biggest drop in the year after Argentina during the period according to Bloomberg which track 53 countries foreign exchange reserves number.
“Pending payments of letters of credit (LCs) worth $50,000 will be cleared this week” said Pakistan’s Finance Minister Ishaq dar on Sunday. “A total of 7,952 cases were pending and after these decisions, nearly 4,400 requests of opening LCs will be subtracted” He added.
“Dollar inflows are increasing in October through the channel of remittances, Roshan Digital Account and exports” says SBP Governor.
Pakistan Rupee depreciate 15 paisa or 0.07 percent in interbank to trade at 218.58 at PST 11:50 against Friday closing of 218.43.
Moreover, In Open Market Rupee is trading at 226 at PST 11:50, according to Forex Association of Pakistan.
The dollar edged lower on Monday as China’s state banks stepped up their intervention to defend a weakening yuan, with banking sources telling Reuters these banks sold a high volume of U.S. dollars and used a combination of swaps and spot trades. The dollar index was last down 0.29% to 112.99.
Pakistan Rupee gains PKR 21.92 or 10.1% in consecutive thirteen sessions before start of recent fall due to finance minister assurance that the government’s is fully committed to fully honor all the commitments made with International Monetary Funds (IMF) and other creditors, besides addressing the issues faced by the local business community and increased financial assistance from financial institutions.
