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Uncertainty about IMF review pushes rupee down

 The rupee has fallen for the fifth straight working day as a result of the anxiety surrounding the ninth assessment of Pakistan's economy by the International Monetary Fund (IMF) under its lending agreement.

In the inter-bank market on Thursday, the currency decreased 0.12% (or Rs0.26) to close at Rs222.67 versus the US dollar.

Currency traders are concerned about the future of the loan programme because the IMF has postponed the ninth review of the economy.

Ishaq Dar, the finance minister, and Nathan Porter, the head of the IMF mission in Pakistan, dispelled the existing doubt during a daytime online meeting.

According to Samiullah Tariq, Head of Research at Pak-Kuwait Investment Company, "they have agreed to swiftly end engagement at the technical staff level and go forward with the ninth review."

The rupee should receive some support from the development. But until the IMF approves the ninth review, the rupee will only move in a limited range of Rs220-225 versus the US dollar, he continued.

Compared to the closing on November 10 at Rs221.42, the rupee has lost a total of 0.56% (or Rs1.25) over the last five working days, according to data from the State Bank of Pakistan.

According to Tariq, the rupee has been under pressure over the past few days due to the rising need for dollars for import payments.

"The rise in the nation's foreign exchange reserves over the previous week, which increased by $3 million to reach about $8 billion, suggests that the central bank is not supplying foreign currency for imports. Instead, he said, "traders are organising payments from the inter-bank market.

According to Tariq, the interbank market's supply and demand for foreign currency causes fluctuations in the exchange rate. The exchange rate has remained under pressure due to the rising demand for dollars.

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