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Dollar closes at Rs133.76 in interbank market

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KARACHI – Pakistani rupee remained stable at 133.76 against the US dollar in the inter-bank market on Wednesday after witnessing its largest drop of 7.5% a day earlier.

In the open market it was traded above Rs135, some exchange companies even sold it for Rs138 during the day.

On October 9, the exchange rate in the interbank market closed at PKR 133.64 to the US dollar, against the previous day’s closing of PKR 124.27 to the US dollar,” the State Bank of Pakistan. “This movement broadly reflects the current-account dynamics and also the demand-supply gap in the foreign-exchange market.

“Although the current-account deficit narrowed in August 2018, a consistent increase in the oil-import bill, on account of rising international oil prices, has exerted pressure in the foreign-exchange market.”

Pakistan had, after much delay, finally decided to approach the International Monetary Fund (IMF) for help, but the rupee is expected to remain under further pressure this week, with currency experts predicting that a sixth round of devaluation is inevitable as a prerequisite for IMF assistance.

Pakistani Finance Minister Asad Umar on Monday announced the country will approach the IMF for assistance, after foreign-exchange reserves declined to $8.4 billion by September 28.

Information Minister Fawad Chaudhry on Tuesday said turning to the IMF was a “difficult decision.”

He told guests at an event in Islamabad: “The country’s remaining reserves can only serve for one month and 16 days, while the country needs $8 billion for debt servicing. We need $28 billion to run the country for this year.”

However, experts believe that the country’s growth will slow after an IMF intervention.

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