Dollar hits Rs 142 in interbank market, government accepts IMF conditions

KARACHI: The US dollar on Friday touched Rs 142 against Pak rupee in the interbank market as the Finance Minister Asad Umer has finally given approval to the State Bank of Pakistan (SBP) to depreciate the Pak rupee. Dollar hit around five per cent in a day today.

The greenback gained by Rs 8 touching all-time high in the interbank market. The dollar closed at Rs 134 on Thursday evening.

The source said, “the decision was taken by the SBP after getting approval from the Finance Ministry.” The government has finally decided to take loan from the International Monetary Fund (IMF) and this is the first step towards IMF and in the evening the central bank will enhance the discount rates by 1.5 per cent to 2 per cent. The SBP discount rates may touch 10 per cent or 10.5 per cent.

Further, the SBP will announce its monetary policy today and the market expects an increase in the interest rate which could be reflecting on the dollar rate. The current policy rate stands at 8.5%.

The debt has increased by Rs 760 billion owing to the rise in the value of dollar.

Because of widening current account deficit, the IMF suggested Pakistani government to realign rupee with market fundamentals to access funds.

On November 23, the US dollar rose to a record high against the rupee as it reached Rs 135.30 in the open market and now touched Rs 142.

“The government signs with the International Monetary Fund (IMF) will be for the welfare of the people,” said Asad Umer Finance Minister on Friday.

Speaking at a ceremony marking his party’s 100-day performance in Islamabad, Umar said: “We will not hide behind the IMF.”

He said despite government measures, the people were still suffering from problems. “The government tried its best to ease burden on the masses and will take further steps to facilitate people.”

He said policy making had a cycle, and each step in this cycle is decided after deliberations. “The 100-day plan just doesn’t end here… we are forming implementation committees to ensure our targets are being achieved,” he added.