On Friday, the rupee hit yet another record low, albeit the decline was moderated by the announcement from the IMF that a team would be traveling to Islamabad the next week to discuss restarting a delayed bailout package.
According to the central bank, the local currency decreased 2.73 percent, or 7.17 rupees, to close at 262.6 to the dollar in the interbank market. When it fell by 9.61 percent on Thursday, it had its worst single-day decline ever.
The rupee has been declining to transition to a market-determined exchange rate since a hold on the currency was released in compliance with IMF conditions.
As part of a $6 billion IMF loan agreed upon in January 2019, the important $1.1 billion tranche was previously slated to be released in November 2022; however, the Fund has yet to approve its release.
The IMF’s expectations that the government carries out fiscal austerity measures and economic reforms have stalled recent discussions about renewing the bailout.
A mission from the IMF will visit Pakistan later this month to discuss the ninth review of the current financial program for the nation, which has been paused, the resident representative of the IMF said on Thursday.
A fruitful IMF visit is essential for a cash-strapped Pakistan, which has hardly three weeks’ worth of import coverage in its foreign exchange reserves and is struggling with a severe balance of payments crisis. Pakistan is anxious to acquire external finance to avoid default.