KARACHI: There was no change in the exchange rate trend and the rupee lost another 52 paise against the US dollar to close at Rs281.47 in the interbank market on Tuesday.
It seems the market would remain calm and cool till the end of the negotiations with the IMF which would begin from Nov 2. Experts believe that the slow appreciation of the dollar would not hurt the IMF meeting and the country would easily receive the second tranche under the 9-month $3bn Stand-By Arrangement.
However, market experts feel that the release of $710 million would not open the doors for other inflows as it did in the first week of July when funds started flowing in from Saudi Arabia and the UAE following the receipt of the first tranche of $1.2bn from the IMF.
Currency experts said there is no inflow in the pipeline in the coming months, especially after Israel’s war on Gaza.
Govt to borrow Rs6tr in three months
Earlier, the government set up a Special Investment Facilitation Council to attract foreign investment, particularly from the Middle East and to sell them important assets of the country.
Treasury bill auctions
The government will borrow over Rs6 trillion from banks during the next three months to pay the domestic debts.
The State Bank of Pakistan (SBP) on Tuesday announced the auction schedule of market treasury bills from Nov 1 to Jan 24, 2024. The government will raise a total of Rs6.061 trillion during this period against the maturing amount of Rs7.662tr.
It shows that the government still faces a shortfall of about Rs1.6tr to pay back the maturing amount. However, bankers said that most of the amount is rolled over and the government pays only interest on these borrowings.
The government is the prime user of banks’ money while the private sector has little chance to borrow mainly because of the very high interest rate of 22 per cent. The SBP kept the interest rate unchanged on Monday expecting a substantial deceleration in the coming months on improved supplies.
Already finding it difficult to survive amid 30pc inflation, the traders and industrialists lament government for increasing gas tariffs by a whopping 172pc which would further push up the cost of production.
The increasing domestic debts left little space for the government to spend for development plans while the fiscal deficit will remain high during the current fiscal year.
The caretaker finance minister reiterated several times during a week that the economy is on track and improvements are visible. However, the high inflation and poor economic growth are enough to disappoint a large number of people looking for jobs.
Published in Dawn, November 1st, 2023