KARACHI: Pakistani rupee Friday remained stuck in reverse gear versus the dollar in the interbank trade as high default risks and low foreign exchange reserves sapped the sentiment.
The local unit closed at 223.17 against the US dollar after losing 0.22% compared to Thursday’s closing value of 222.67.
According to Arif Habib Limited, a number-crunching brokerage house, the country’s credit-default swaps (CDS) spiked to 75.5% on Wednesday from 56.2.
The delay in the International Monetary Fund (IMF) talks is the main culprit here, analysts said.
“With country’s default risk on the rise, foreign exchange reserves thinning, and political noise growing louder and louder, marred the sentiment,” a money dealer said.
A holdup in the ninth review of the IMF loan programme also remains a cause of concern for investors, according to analysts.
Though a date has not yet been set, the IMF staff mission is anticipated in Islamabad by end of the current month, as the fund requires Pakistan to take mandatory actions.
The government has urged the IMF to grant it some exceptions because of flood losses, but the fund is pushing Pakistan to maintain the agreed tax-to-GDP ratio of at least 11%.
The State Bank of Pakistan’s (SBP) foreign exchange reserves edged up by $3 million to $7.96 billion as of November 11, 2022.
According to data released by the central bank on Thursday, total liquid foreign reserves held by the country stood at $13.8 billion. Net foreign reserves held by commercial banks clocked in at $5.84 billion.
Remittances sent home by overseas Pakistanis fell over 9% month-on-month to $2.2 billion in October owing to a widening exchange rate differential in the open and interbank market and a global slowdown.