Washington DC January 20 2024: International Monetary Fund predict the Pakistan Rupee for current fiscal year (2024) to close at 322 against dollar in its recently published report agains earlier assumption of 330, based on working of AUGAF.
IMF projected 330 against dollar for fiscal year (2024) back in Jul 2023.
IMF published country report today followed by the completion of first review of Stand-By Arrangement (SBA) of SDR 2,250 million for the period of nine months. The Board’s decision allows for an immediate disbursement of SDR 528 million (around $700 million), bringing total disbursements under the arrangement to SDR 1.422 billion (about $1.9 billion).
On the external front the IMF forecast the current account deficit of USD 5,649 million, (against USD 6,424 million earlier in Jul 2023) during current year which is 1.6 percent percentage of GDP. That said the size of GDP in terms of USD will remain at USD 353,063 million and in Rupee terms the IMF has projected the size of GDP at 106,577 billion turn the average PKR/USD parity to be 302 for this fiscal year. For this average PKR/USD rate Rupee must close the current fiscal year at 322 against Dollar.
IMF also project the average deprecation for next five years at 8 percent to reach at 381 by 2028.
IMF said “the program is fully financed and the reserve position at end-FY24 is consistent with program objectives, although risks remain exceptionally high. Over US$3 billion in commitments made at the time of the SBA request have already been delivered, with an additional US$1 billion in multilateral support expected by end-2023. Further assurances for bilateral support of US$0.7 billion were reconfirmed ahead of this review”
However, the Islamic Development Bank is now likely to deliver only a small fraction of the US$1 billion pledged ahead of the SBA during the program period. Offsetting that, a debt rearrangement with a major bilateral creditor has generated amortization savings of around US$1.2 billion in both FY24 and FY25.
Nonetheless, financing risks remain exceptionally high, arising from large public sector external rollover needs, a persistent current account deficit, a difficult external environment for Eurobond and Sukuk issuance, and limited reserve buffers in case of delays to anticipated inflows.
