ISLAMABAD: The Pakistani rupee continued to slide against the US dollar while the stock market declined more than 120 points after an initial surge on Tuesday amid an ongoing economic performance review carried out by the International Monetary Fund (IMF) under a $3 billion bailout facility.
The country has faced tough economic challenges in recent years, compounded by a balance-of-payments crisis and unprecedented monsoon floods, which led to massive depreciation of the national currency and impacted the performance of the Pakistan Stock Exchange (PSX).
Officials in Islamabad managed to secure a nine-month, standby arrangement (SBA) amounting to $3 billion in July to help avert a sovereign debt default.
The country also received the first tranche of $1.2 billion as part of the economic stabilization program. A successful outcome of the ongoing review is likely to help the country unlock an additional $710 million.
“Interbank closing #ExchangeRate for today,” the central bank proclaimed in a social media post, showing the interbank closing rate of Rs286.39, amounting to a depreciation of 0.38 percent from Monday when the market closed at Rs285.29.
The rupee made a significant recovery since the interim Pakistani administration took over in August, through administrative measures as the authorities cracked down on dollar hoarding and smuggling.
However, the Pakistani national currency has been losing its value again since October 20, when the market closed at Rs278.80.
The PSX, meanwhile, displayed bullish sentiment on Tuesday initially, breaching the 54,000-mark. Yet, as investors squared their positions, the market plummeted by 124.63 points and closed at 53,735.73.
The government’s negotiations with the IMF are ongoing, and a positive outcome is expected to improve the situation in the currency and stock markets.
