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Unless investor confidence returns and the International Monetary Fund (IMF) revives its bailout program, experts have warned that the Pakistani rupee is projected to fall in the coming days.
The rupee fell sharply last week from 262.6 to an all-time low of Rs276.58 against the US dollar in the interbank market.
“It seemed to have stabilized around the 270 level until the Prime Minister and Finance Minister spoke,” Tresmark said in a report published in Business Recorder on Saturday.
“Traders anticipated that the leadership was still looking for alternatives to the IMF or that they would waste more time in negotiations with them when the PM claimed that the IMF is imposing hard conditions, while the FM indicated they are looking for philanthropists for billions of dollars.” it said.
Also read: ‘Will have to agree to harsh IMF conditions’, says Govt
“But in our assessment, the PM may have been only trying to prepare other stakeholders and vote base for harsh steps and measures,” the report said.
It added that “another more important factor in the rupee’s downfall was the steep decline in reserves which are now at $8.7 billion (down by $712 million).”
The State Bank of Pakistan’s (SBP) foreign exchange reserves decreased by $592 million to just $3.09 billion, according to data released on Thursday, marking the lowest level of central bank reserves since February 2014.
Tresmark added that unless investor confidence is restored, the rupee will continue to be under pressure.
“Until and unless traders don’t feel confident of things to get better, especially the reserves situation, the rupee will continue to fall, irrespective of its level.
“Traders we spoke to think the 1st and 2nd level of resistance of 280/$ & 285/$ will be ceded in the coming week, unless the IMF comes on board.
