The Pakistani rupee (PKR) depreciated by a record 28 per cent or around 82 PKR against the dollar in the outgoing fiscal year, a brokerage house reported primarily as a result of a stalled International Monetary Fund bailout programme.
The PKR slipped to 286 against the dollar on Tuesday, compared with 204.8 on June 30, 2022, in the interbank market, The News reported.
The PKR appreciated 0.25 per cent against the dollar on a day-on-day basis. Monday saw the closing price at 286.71 against the dollar.
“FY23 was a challenging year for Pakistan. The PKR came under pressure primarily due to the IMF programme suspension,” said Fahad Rauf, head of research at Ismail Iqbal Securities.
“FY24 is again going to be challenging as it’s the election year, and the uncertainty around the IMF programme continues,” Rauf added.
“If Pakistan manages to complete the ongoing review, the pressure on the rupee would reduce to some extent. However, it would only be sustainable if Pakistan enters into another IMF programme fairly quickly."
The depreciation of the rupee was primarily driven by challenges posed by debt repayments resulting in the depletion of reserves as well as a significant decline in capital inflows, The News quoted Arif Habib Limited, a Karachi-based brokerage firm, as saying in a statement.
After making the monetary and fiscal policy decisions required by the global lender for the release of the $1.1 billion tranche, Pakistan has been waiting for a deal with the IMF.
The country's loan programme, which has been stagnant for more than six months, expires on June 30.