The Pakistani rupee fell to over a one-year low on delays in reaching an agreement with the International Monetary Fund (IMF) on the loan review and widening of the trade deficit.
The rupee was trading around 280.30 to a dollar on Tuesday morning, up by 13 paisa from Monday’s close of 280.17.
Since the start of this year, the rupee has lost 0.58%, while from the start of fiscal year 2024-25, it has depreciated by 0.65%.
The dollar’s value has also been rising slowly in the open market and was trading around 282.10, up by 10 paisa from Monday.
In a week’s period, the dollar has gone up by around 50 paisa in the open market.
The delay in reaching an agreement with the IMF was the main reason for the pressure on the domestic currency. However analysts were hopeful that as virtual talks have been scheduled, the door has not been closed and in a week’s time, the country would get the approval as most of the key conditions have been met.
The widening trade deficit was also a cause for concern. During eight months of the fiscal year, it was up by $1 billion to $15.8 billion while in February alone it widened by 34.5% to $2.3 billion.
Acceleration in imports were the primary reason for the widening trade deficit.
However, the current account numbers provided some relief as in eight months of the fiscal year it showed a surplus of $691 million. The central bank is of the view that in full fiscal year current account would be in surplus or deficit of 0.5% of GDP.
