According to the Trustmark, the value of the rupee dropped even more in the interbank market due to a delay in signing the agreement with the International Monetary Fund (IMF). The rupee was last traded at 210.19 during the intraday session on Monday. On Friday, it reached a high of 208.75. The value of one rupee decreased by 4.89 rupees during the last week.
Suppose Pakistan cannot agree with the International Monetary Fund (IMF) for the resurrection of a $6 billion financing package. In that case, currency traders predict that the rupee will trade on the back foot throughout the week. This outcome will occur unless Pakistan is prosperous in its negotiations.
A foreign currency broker stated, “It is difficult to see a respite in the rupee until favorable news comes from the IMF.” “It appears difficult to see a respite in the rupee.”
The line-up of import payments and dropping foreign currency reserves amid falling reserves would pressure the rupee, causing it to lose additional ground concerning the dollar in the next week. Any progress made in discussions with the IMF is the only thing that can save the rupee from falling much more, he continued. According to him, the ultimate exchange rate for the rupee against the dollar may be anywhere between 195 and 200.
Officials from the IMF are now discussing with the authorities in Pakistan, and it is anticipated that a breakthrough will occur this coming week. A steeper decline in foreign currency reserves, a delay in the IMF program, and a rise in the value of the US dollar in comparison to other major currencies all contributed to the rupee’s devaluation, which was caused by all three of these factors.
As of June 10, the reserves held by the central bank were $8.99 billion, representing 1.32 months’ worth of imports. This is a decrease of 2.6 percent. The rapid depletion of reserves can potentially exacerbate the existing problems with the balance of payments. The selling pressure was more substantial in risk assets such as equities and cryptocurrencies than in bonds and commodities. Many other currencies, such as the yen, the Indian Rupee, the Baht, the Turkish Lira, the Ringgit, the Euro, the British Pound, the Swiss Franc, and the Bangladeshi Taka, all reached multi-decade or lifetime lows.
Currencies with the worst performance:
According to information provided by Ismail Iqbal Securities, the value of Pakistan’s currency has decreased by 14.57 percent versus the dollar this year, making it one of the poorest performing currencies in the world.
It is not the rupee that has suffered a decline and underperformed its regional rivals and numerous worldwide currencies; instead, it is the others that are doing poorly.
The Pakistani rupee and the Japanese yen have seen practically identical losses versus the dollar in this calendar year. The value of the yen dropped by 13.34 percent.
One of the 15 currencies that have seen a decline in value is the local unit. The statistics showed that the Sri Lankan rupee had the poorest performance, falling by 43.9 percent, followed by the Laotian kip, which had dropped by 24 percent, the Turkish lira, which had lost by 23.18 percent, and the Ghana cedi, which had fallen by 22.33 percent.