Pakistan’s rupee fell to a record on a Wall Street Journal report, rebutted by the central bank, that the nation may seek loans from the International Monetary Fund to pay debts.
The South Asian country’s trade deficit could make it difficult to meet more than $4 billion in loans coming due in the fiscal year starting July, the newspaper reported on May 29, citing State Bank of Pakistan Governor Yaseen Anwar. The currency dropped as much as 1.3 percent, the most since 2009, before the central bank issued a rebuttal, saying there is “no risk in being able to make next year’s IMF payments from our adequate reserves.”
The rupee slid 0.9 percent to 93.8350 per dollar as of 2:21 p.m. in Karachi, according to data compiled by Bloomberg. The currency has dropped 4.1 percent this year as Pakistan tries to mend a fractious relationship with its main aid provider, the U.S., which scaled back funds over differences on how to stop militant groups from operating in the country’s tribal areas.
“People went into a little panic on political developments such as Pakistan-U.S. relations and payment to IMF,” said Malik Bostan, the Karachi-based president of the Forex Dealers Association. “Many people are converting rupee into other currencies to prevent exchange losses.”
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