The rupee lost ground for the 16th consecutive session on Thursday, closing at 202.01 against the US dollar in the inter-bank market as negative sentiment arising from Pakistan’s failure to revive the $6 billion International Monetary Fund (IMF) programme persisted.
However, on a slightly positive note, the rupee regained some ground after having slipped to 202.5 in intra-day trading.
As per the State Bank of Pakistan (SBP), the currency closed at 202.01 after a day-on-day depreciation of 9 paisas or 0.04%, a nominal fall in comparison to previous sessions.
On Wednesday, the local currency closed at 201.92, after a day-on-day depreciation of 51 paisas or 0.25%.
Still, cumulatively, the Pakistani currency has shed over 8% in the previous 16 sessions.
The rupee’s woes have been ongoing amid hope that revival of the IMF programme would bring respite to the currency. However, late on Wednesday night, the global lender released a statement citing that the talks with Pakistan for the 7th review under the $6 billion Extended Fund Facility (EFF) programme remained inconclusive.
The IMF pointed out “deviations” on fiscal sides from the policies agreed in the last review. Resultantly, no staff level agreement was reached and the revival of the EFF was delayed.
Taking to twitter, Finance Minister Miftah Ismail then said that the government remains committed to reviving the programme.
Meanwhile, some clarity on the political front acted as support for the local currency and capped its decline. After marching to Islamabad in an eventful long march, Pakistan Tehreek-e-Insaf (PTI) Chairman Imran Khan called off the protest but gave a six-day deadline to the incumbent government to fulfil the demand for early elections.
Speaking to Business Recorder, Pak-Kuwait Investment Company’s Head of Research Samiullah Tariq stated that the current fall in the rupee stemmed from pessimism in the market related to the IMF EFF.
However, he said “the impact has been marginal.
“The market had expected the local currency to plunge steeply following a negative statement from IMF.”
“We can say that there is less pressure in the market right now,” he added.