Rupee gains value against US dollar in interbank

KARACHI: The US dollar on Monday continued to shed value against the Pakistani rupee, following a decision from the government to reverse fuel subsidy, a measure needed to restart the US$6 billion programme with International Monetary Fund (IMF).

The US dollar is trading at Rs198.71 in the interbank, an Rs1.06 down from Friday when it traded at 199.76. In the open market, the US dollar is still trading between Rs198 to Rs202.

The Pakistan rupee on Friday gained value against the US dollar in the intraday trading, just hours after the federal government reduced fuel subsidies and increased petroleum prices to reach a staff-level agreement with the International Monetary Fund (IMF).

According to forex dealers, the greenback is trading at Rs199.50 after depreciating Rs2.51 against the local currency in the interbank market. The dollar had closed at Rs202.01 against the Pakistani rupee the other day.

Hike in fuel prices

The federal government on Thursday increased petrol and diesel prices up to Rs30 per litre to reduce fuel subsidies.

Finance Minister Miftah Ismail made the announcement at a press conference. He announced to hike the petrol, diesel, light diesel and kerosene oil prices up to Rs30 per litre.

After the recent hike, the new price of petrol is Rs179.86 per litre, high-speed diesel (HSD) Rs174.15, kerosene oil Rs155.56 and light diesel Rs148.31 rupees.

Miftah Ismail had said the government was currently giving a subsidy of Rs56 per litre and so far bore Rs55 billion financial loss within 15 days.

Hike in electricity prices likely 

The federal government has decided to hike electricity prices by Rs7 besides privatization of profitable public-owned DISCOs after talks with the International Monetary Fund (IMF) for the release of a US$1 billion tranche, it emerged.

According to sources privy to the matter, the hike of Rs 7 in electricity prices would include an increase in basic tariff and fuel adjustment charges. “The hike in power tariff will be applicable from July 01,” they said.

Moreover, the IMF has also expressed concern over the Rs2,600 billion power tariff and suggested the government immediately privatize the public-owned profitable DISCOs.  It has further been suggested to handover loss-making DISCOs to provinces.

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