Karachi March 3 2023: Pakistan Rupee appreciates in Interbank against dollar on expectation of reaching agreement with IMF by next week and massive increase in interest rate by the central bank to make the rupee attractive.
Pakistan Rupee appreciates PKR 6.62 or 2.38 percent in Interbank to close the trading session at PKR 278.46 on Friday, shrinking the weekly losses to PKR 18.47 or 6.63 percent against the dollar in Interbank.
In Open market Rupee is trading at 283.15 against dollar at PST 16:40 on Friday against yesterday closing of PKR 289.15.
Yesterday, the rupee has lost PKR 18.97 or 6.6 percent in Interbank to close the trading at PKR 285.08 as country failed to reach agreement with IMF even after passing 21 days of staff level visit.
IMF demands free float exchange rate and increase in revenues along with circular debt management plan and removal of subsidies for the resumption of agreement.
“Pakistan Central Bank has no intentions to link the dollar exchange rate to Afghan border as such rate doesn't exist officially. As a central bank we cannot follow any grey market rate and refutes all rumors regarding linking of dollar exchange rate with Afghan border rate", says Governor State Bank of Pakistan.
“Anti-Pakistan elements are spreading malicious rumors that Pakistan may default. This is not only completely false but also belie the facts. SBP forex reserves have been increasing and are almost USD 1 billion higher than four weeks ago despite making all external due payments on time. Foreign commercial banks have started extending facilities to Pakistan. Our negotiations with IMF are about to conclude and we expect to sign Staff Level Agreement with IMF by next week. All economic indicators are slowly moving in the right direction” says Pakistan Finance minister Muhammad Ishaq Dar.
Yesterday, the Monetary Policy Committee (MPC) decided to increase the policy rate by 300 basis points to 20 percent citing short-term costs of bringing down inflation are lower than the long-term costs of allowing it to become entrenched. Barring unexpected future shocks, the MPC noted that this monetary tightening decision has pushed the real interest rate in positive territory on a forward-looking basis.
Chinese Foreign Ministry spokeswoman Mao Ning said her nation urged the “concerted efforts of all parties to play a constructive role in the economic and social developments of Pakistan.”
The “radical fiscal policy of a certain developed country is the main reason behind the financial difficulties of a large number of developing countries, including Pakistan,” she added Thursday at a regular press briefing in Beijing, without naming the US.
Later on, Chinese Premier Li Keqiang talked with Managing Director of the International Monetary Fund (IMF) Kristalina Georgieva on the phone at the latter’s request at Ziguangge of Zhongnanhai to talk about the debt issues of low income countries.