Karachi July 6 2022: Pakistan rupee drop against the dollar by rupee 1.01 in the interbank trading on news of delay in IMF tranche and approval of foreign loan repayment of nearly one billion by ECC amid strengthening of Dollar against all currencies due to fears of global recession.
Dollar stood by a two-decade high on the euro and strengthen against international currencies on Wednesday as investors’ fears deepened that the continent is leading the world into recession.
Yesterday, Economic Coordination Committee approved supplementary grant in favor of Economic Affairs Division amounting to Rs. 193.006 Billion or equivalent to USD 932 million at yesterday dollars rate for foreign loan repayments.
“I have been reading with some amusement all the tweets and stories about IMF program being postponed or delayed due to some anti-corruption law. There is no truth to it. The IMF program is on track.” says Finance Minister Miftah Ismail.
Pakistan position is more peculiar due to historic high trade deficit of USD 48.3 billion recorded for fiscal year 2022, which runs from July to June.
As per the latest data released by Pakistan Bureau of Statistics, trade deficit increased by 55.29 percent YoY to USD 48,259 million on imports of more than USD 80 billion during the fiscal year 2022 which runs from July to June.
The previous high trade deficit was registered in fiscal year 2018 when it recorded at USD 37,583 million on imports of USD 60,795 million.
The Rupee lost nearly 0.5% or 1.01 rupee to trade the at 207.95 in the interbank.
On last trading day, Rupee closes at Rs 206.94 in the interbank market.
Most likely, two tranches of about $918 million each (or $687m Special Drawing Rights, or SDRs) under combined 7th and 8th review of Extended Fund Program would be made available to Pakistan at once in the last week of July of the first week of August.
The government of Pakistan has already received the Memorandum of Economic and Financial Policies (MEFP) from the International Monetary Fund (IMF) on 28th June 2022, which is a crucial step to validate that both sides have reached an agreement for the revival of $6 billion programs.
