The rupee remained under pressure on Monday, with analysts citing the uncertainty surrounding the revival of an International Monetary Fund (IMF) programme and a lack of confidence in the government.

The local currency closed at Rs284.03 per dollar, according to data shared by the State Bank of Pakistan (SBP). This equates to a depreciation of Rs2.32 or 0.82 per cent from Friday’s close of Rs281.71.

Saad bin Naseer, director of financial data and analytics portal Mettis Global, said the main reason for the depreciation is a lack of confidence in the government’s statements. He noted that despite government assurances, it had been over a month since an IMF delegation’s visit to Pakistan, and a staff-level agreement (SLA) was yet to be signed.

Naseer said the rupee would start appreciating again once the IMF loan programme was revived, adding that higher inflows were also expected in Ramzan.

Prime Minister Shehbaz Sharif had assured the Senate last week that the IMF agreement would be signed “soon”. During the same session, Finance Minister Ishaq Dar said that an assurance from “friendly countries” to fund a balance of payment gap was the last hurdle in securing an IMF deal.

Several countries had made commitments to support Pakistan during previous IMF reviews, he said, adding that the IMF was now asking for those commitments.

However, Tresmark’s Head of Strategy Komal Mansoor commented today, “There is fresh speculation that Saudi Arabia may not commit any aid or loan to us anymore. Other than China, none of the friendly countries have given reassurances of requisite funding. The message is that it could take one day, one month, or one year.

“The confidence has been so low that not even a dollar has been invested in bonds or treasury bills this month,” she added.

The analyst further said the country’s situation “does not look very promising and unfortunately, no one seems to have a plan B”.

Mettis Global’s Naseer also attributed the rupee’s depreciation to the smuggling of the greenback across the “porous” border with Afghanistan, which he said had led to a shortage of dollars in the open market.

The local currency has been on the decline since Thursday over delays in the IMF agreement for the release of a $1.1 billion economic bailout that Pakistan needs to avoid the threat of default.

The global lender has asked Pakistan to arrange $7bn for debt servicing during the current fiscal year before it releases the $1.1bn tranche.