The Pakistani rupee (PKR) has continued a speedy crash against the US dollar with another big fall as the greenback was traded at a record high price of 276.58 PKR in the interbank market, the central bank announced.
According to the State Bank of Pakistan (SBP), the latest fall came during trading on Friday, reports Xinhua news agency.
The US dollar closed at 271.36 PKR on Thursday.
On the last working day of the week, the local currency depreciated by 5.22 PKR, or about 1.89 per cent, against the US dollar, official figures showed.
Talking to Xinhua, Reza Baqir, former governor of the SBP, said that depleting foreign exchange reserves of the country, along with the fall in exports and decline in remittances from overseas Pakistanis, is directly influencing the foreign reserves and eventually the value of the rupee.
Baqir said that all these factors as well as the global recession is contributing to negative sentiments and uncertainty in the market, which resulted in the free fall of the local currency.
Since the start of this year, the rupee has depreciated by 44.92, Geo News reported.
Capital market expert Saad Ali said that reports regarding the rejection of the circular debt management plan (CDMP) presented by the government to the International Monetary Fund (IMF) had dented the market’s confidence.
Ali said that these reports created doubts about the possibility of a bottleneck in the ongoing government-IMF talks, Geo News reported.
An IMF mission is currently in Pakistan holding talks on the ninth review that will continue till February 9 after which a staff-level agreement is expected between the two sides.
The IMF has rejected the CDMP presented by the government and asked the authorities to raise the electricity tariff by Rs 12.50 per unit in order to restrict the additional subsidy at Rs 335 billion for the current fiscal year.
During the second day of technical-level talks, the Washington-based lender termed the revised CDMP as “unrealistic”, which is based on certain wrong assumptions. So the government will have to bring more changes in its policy prescription to restrict the losses of the cash-bleeding power sector.
The IMF and the Finance Ministry will work out a gap on the fiscal front after which different additional taxation measures will be finalised through the upcoming mini-budget.
The revised CDMP envisages an increase in the monster of circular debt to the tune of Rs 952 billion for the current fiscal year against an earlier projection of Rs 1,526 billion, Geo News reported.
(This report has been published as part of the auto-generated syndicate wire feed. No editing has been done in the headline or the body by ABP Live.)