Pakistani rupee drops to all-time excessive following failed IMF tranche negotiations

KARACHI, Pakistan, Oct. 18 (Reuters) – The Pakistani rupee hit a file low of 173.20 in intra-day commerce in opposition to the US greenback on Monday earlier than closing at 172.78, under the earlier shut of 171, 18, after the announcement of failed talks with the Worldwide Financial Fund, merchants stated.

The federal government’s finance ministry on Monday dismissed native media experiences over the weekend that talks October 4-15 to launch a $ 1 billion mortgage tranche have been inconclusive.

“Negotiations between Pakistan and the IMF are progressing positively. No timetable has been set at any time for the conclusion of the talks, ”stated an announcement issued by the Ministry of Finance.

In June, an analogous spherical of talks between the 2 sides failed to achieve settlement on the phrases of the tranche.

“Uncertainty over IMF program after experiences launched that Pakistan and IMF didn’t agree on sure phrases has led to the present depreciation of the rupee,” Reuters informed Reuters Atif Zafar, Chief Economist and Director of Topline Securities.

Final month, Fitch Rankings downgraded its forecast for the Pakistani rupee for this 12 months and subsequent as a result of a wide range of components, together with an elevated move of US {dollars} to neighboring Afghanistan.

Fitch’s forecast for the typical rupee charge this 12 months is now 164 to the US greenback, down from 158 beforehand. For 2022, Fitch expects a mean charge of 180 in opposition to a earlier forecast of 165.

The State Financial institution of Pakistan earlier indicated that the greenback could recognize within the present fiscal 12 months as a result of an anticipated larger present account deficit. (Reporting by Raza Hassan; enhancing by Philippa Fletcher)

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