After shedding over 4% of its value across the previous week, the Pakistani Rupee is once again losing ground against the US Dollar at the start of the new week.
At 10:15 UTC, USD/PKR is trading at 167.32, up from last week’s close of 165.11 as investors weigh up the probability of the IMF delaying the third tranche of the rescue package. The Rupee weakened from 158.2 to 165.11 across the previous week.
Delay Expected For 3rd IMF Tranche
The Pakistan Rupee is trading on the back foot amid reports that the International Monetary Fund (IMF) could delay the release of $450 million, the third tranche under the existing Extended Fund Facility (EFF) because the macroeconomic targets could need re-adjusting given the coronavirus outbreak.
However, the IMF have agreed to consider Pakistan’s request for \41.4 billion under Rapid Finance Instrument (RFI) for addressing the Covid-19 pandemic.
The Pakistan Rupee remains under pressure despite risk sentiment across the global markets showing some signs of stabilisation. Coronavirus numbers over the weekend indicating that the number of cases and deaths could be levelling out in the worst affected areas has broadly helped risk sentiment on Monday. Asian stock markets advanced and US stock markets are pointing to a stronger start.
However, investors continue to sell out of the Pakistani stock market. The Karachi 100 index has tumbled 2.6% on Monday to 30780.
US Dollar Edges Higher
After a flat start, the US Dollar was pushing higher versus its major peers on Monday. Whilst the broad mood in the market has undoubtedly improved, data is only just starting to show the size of the hit t the US economy.
On Friday, the US jobs report showed 701,000 jobs were lost in March, ending 113 consecutive monthly job gains. However, the timing of the data collection for the report means that the worst is yet to come. The data was up until 12th March. The first US lock down started in California on 20th March.
There is no US data due today. Investors will remain focused on coronavirus numbers.
