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Pakistan's Rupee Slides amid Uncertainty over IMF Deal

KARACHI, Pakistan, Nov 11 (Reuters) - Pakistan’s currency lost its value by 1.12 rupees in intraday trading on Thursday, following a brief rebound after Saudi support package announcement last month amid uncertainty over a International Monetary Fund (IMF) deal, dealers said.

The rupee slid to 174 against the U.S. dollar, losing 1.12 rupees on Thursday. In the last four sessions, it lost rupees 4.04 against the dollar.

Rupee has lost 10% of its value against the dollar since July 1, the start of the fiscal year.

Last month, long-time ally Saudi Arabia announced $3 billion to support Pakistan’s foreign reserves and extending financing of oil derivatives trade for a total of $1.2 billon.

The Saudi money, which is expected to shore up Pakistan’s shrinking reserves, has not been received yet.

“The volatility in the Pakistani rupee is primarily due to ongoing negotiations with international financial institutions,” Saad Hashemy, executive director at BMA Capital, told Reuters.

Pakistan has been in talks with the IMF in the last month to secure a $1 billion funding tranche, but its sixth review remained inconclusive.

On Nov. 1, Shaukat Tarin, adviser to the Prime Minister on Finance and Revenue said that an agreement with the IMF over the revival of the $6 billion Extended Fund Facility (EFF) had been reached and a formal accord will be signed later in the week.

But a formal announcement is awaited.

“I think demand for dollars is consistently higher than supply, therefore the parity is moving up,” Samiullah Tariq, head of research and development at Pakistan Kuwait Investment Company Limited said.

The reason for higher demand is current account deficit, he added.

(Reporting by Syed Raza Hassan; Editing by Shailesh Kuber)

Source: Reuters

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