Rupee weakens

Our Correspondent
Thursday, Mar 30, 2023

KARACHI: The rupee ended weaker on Wednesday as a result of increased dollar demand from importers and a delay in the bailout agreement with the International Monetary Fund, dealers said.

In the interbank market, the rupee closed at 283.92 per dollar, compared with Tuesday’s close of 283.55 as it dropped 0.13 percent day-on-day. The local unit lost 50 paisas to settle at 286.50 to the dollar in the open market.

“Today, the rupee was under pressure because importers had a greater demand for dollars than there were available supplies,” said a currency dealer. “Market uncertainty surrounds the timing of a staff level agreement with the IMF. The investor sentiment suffered as a result,” he added.

In a key move, Prime Minister Shehbaz Sharif on Tuesday claimed that the IMF was onboard with the new programme but asked for a step-by-step guarantee “fulfilled from friendly countries before it releases bailout funds”.

The IMF programme is required now and immediately after June again, according to analysts. “Even if we are getting the programme now, the negotiations for the next programme will immediately begin considering the next programme is of a greater time period, will have more conditions, long negotiations, and IMF will ask for tougher structural reforms,” said Chase Securities in a note. “It is now well known that IMF will take its due time to handover the programme and the debt repayments in next financial year is north of $24 billion,” it added.