admin 
KARACHI, (MANEND NEWS): Rupee fell against the dollar on Monday as the excitement around the International Monetary Fund (IMF) stand-by arrangement waned, and the local unit came under pressure from the demand for US dollars for import payments.
In the interbank market, the local unit dropped 0.60 percent or Rs1.67 to close at Rs279.26 against the dollar. The currency lost Rs2 to settle at Rs286 to the dollar in the open market.
“I think PKR is in the stable range now around 280. Two forces are acting in opposite direction, ie funds coming in post-IMF deal and imports backlog getting cleared,” said Fahad Rauf, the head of research at Ismail Iqbal Securities. “This is restricting PKR from any major positive moves,” he added.
As the initial excitement surrounding the approval of the IMF stand-by arrangement settles, the spotlight is back on the economy, with the government implementing its commitment to the IMF by raising the base power tariff by Rs4.96 per unit, said Chase Securities in a client note.
The caretaker setup is set to take over in less than a month, leading to elections, and the government is actively taking necessary steps to unlock the second tranche. With inflows from friendly countries and the IMF, amounting to approximately $4 billion, foreign exchange reserves are out of the danger zone, and the import cover has increased to about 2 times, it added.
Almost everyone, even IMF, was surprised by the IMF’s agreement. It does bring the country great relief. It has prevented the global macroeconomic collapse as well as the fear of an impending credit default, according to analysts.
The future structural economic path is where there is ambiguity. Similar sentiments are being reflected in the currency market.