In the first session after speculation ended following the announcement of the coalition government’s maiden federal budget 2022-23, the Pakistani rupee once again surpassed the 203 mark in the interbank market against the US dollar.
The local currency lost Rs0.65 in the interbank market and was trading at 203, as reported by Geo News.
“The sentiment is negative across all capital markets today,” financial market expert Saad Ali said Monday.
The expert said that the federal budget for the next fiscal year was being seen as a “major milestone” for the revival of the stalled $6 billion International Monetary Fund (IMF) programme.
However, Ali stated that the market believes that the federal budget is “insufficient” and the Fund may not accept this budget.
“In line with the statement of Finance Minister Miftah Ismail over the weekend, the market players expect that the government might have to revisit its proposed allocations and targets set in the federal budget in order to convince the IMF,” he added.
Ali went on to say that the federal budget has jeopardized the long-awaited IMF program. He maintained that more clarity is required because, for the time being, the sentiment is that the government must do more.
It is worth noting that the local currency closed at an all-time low of Rs202.83 on June 7, surpassing its previous record low of Rs202 on May 26.
Because of the high dollar demand for import payments ahead of the fiscal year’s end, traders predicted that the local currency would remain under pressure in the coming week.
The local currency was volatile, having swung between 200.06 to a new record low of 202.83 per dollar during the outgoing week. It closed at 202.35 to the dollar on Friday.
The remittances dropped by 25.4% month-on-month to $2.3 billion in May