Pakistani currency maintained its downturn for the second consecutive working day on Monday, falling 0.24%, or Rs0.70, to almost three-week low at Rs287.60 against the US dollar in inter-bank market.

The currency had closed at Rs286.93 against the greenback on Friday, according to the State Bank of Pakistan (SBP).

On the other hand, the week-long sharp fluctuation in the currency rate came to an end in the open market as the rupee closed unchanged at Rs305/$, according to the Exchange Companies Association of Pakistan (ECAP).

The latest drop in the inter-bank market came in the wake of conflicting reports about Pakistan’s foreign debt restructuring as the foreign exchange reserves may remain under pressure.

Finance Minister Ishaq Dar announced the other day that he would opt for debt restructuring with or without the International Monetary Fund (IMF), indicating the inability to continue paying off debt on time.

State Bank of Pakistan (SBP) Governor Jameel Ahmad, however, emphasised that no debt restructuring was in his knowledge.

Secondly, the forex reserves have continued to drop for the sixth consecutive week, falling below $4 billion. The low reserves provide import cover for hardly a month.

The return of calm to the open market was attributed to the central bank’s tight monitoring of exchange business by the currency dealers.

The central bank on Monday reminded Category B currency exchange companies that they were not working in compliance with its directives.

The SBP had directed them to install the biometric verification system in consultation with the NADRA to record rupee-dollar exchange transactions with individual buyers and sellers. The bank has extended the last date for installation of the biometric system till July 31, 2023.

Published in The Express Tribune, June 13^th, 2023.

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