KARACHI, Pakistan, Oct. 18 (Reuters) – The Pakistani rupee hit a record low of 173.20 in intra-day trade against the US dollar on Monday before closing at 172.78, below the previous close of 171, 18, after the announcement of failed talks with the International Monetary Fund, traders said.
The government’s finance ministry on Monday dismissed local media reports over the weekend that talks October 4-15 to release a $ 1 billion loan tranche were inconclusive.
âNegotiations between Pakistan and the IMF are progressing positively. No timetable has been set at any time for the conclusion of the talks, âsaid a statement issued by the Ministry of Finance.
In June, a similar round of talks between the two sides failed to reach agreement on the terms of the tranche.
“Uncertainty over IMF program after reports released that Pakistan and IMF failed to agree on certain terms has led to the current depreciation of the rupee,” Reuters told Reuters Atif Zafar, Chief Economist and Director of Topline Securities.
Last month, Fitch Ratings downgraded its forecast for the Pakistani rupee for this year and next due to a variety of factors, including an increased flow of US dollars to neighboring Afghanistan.
Fitch’s forecast for the average rupee rate this year is now 164 to the US dollar, down from 158 previously. For 2022, Fitch expects an average rate of 180 against a previous forecast of 165.
The State Bank of Pakistan earlier indicated that the dollar may appreciate in the current fiscal year due to an expected higher current account deficit. (Reporting by Raza Hassan; editing by Philippa Fletcher)