The rupee on Friday once again depreciated against the US dollar amid reports that the International Monetary Fund (IMF) has been asking the government to do more on the economic front.
At 12:15 p.m. during afternoon trade, the rupee was trading at 276 to the dollar in the interbank market.
The local currency dropped by Rs4.65 from its previous day’s closing value of Rs271.35 to the US dollar.
IMF had rejected the government’s circular debt management plan the day before.
And today, it was announced that the Fund has ordered the government to implement significant, high-quality, and long-lasting tax and non-tax revenue measures in order to raise additional funds to close the anticipated fiscal framework gap of Rs. 600 billion.
The government has been urged by the IMF delegation to increase the Federal Board of Revenue’s (FBR) tax collection target in order to bring it into line with the anticipated nominal growth for the current fiscal year, which will be primarily driven by an increase in CPI-based inflationary pressures.
Alarmingly, as the talks go on, the State Bank of Pakistan’s (SBP) foreign exchange reserves have plummeted to just $3.08 billion as of January 27.
The country is dealing with a double-edged sword because the dollar inflows in the form of bilateral and multilateral loans have been significantly pinched off and reduced.
