KARACHI: Rupee is expected to further depreciate around percent by the endof the next fiscal year of 2019 as external financing requirements areprojected to remain elevated in the medium-term on growing imports, abrokerage said on Wednesday.

“We expect a further depreciation of around 5 percent in rupee/dollar valueby the second half of 2018 followed by approximately 5 to 7 percentdevaluation during 2018/19,” Alfalah Securities said in an economic brief.“We expect further market-driven downward adjustment of the exchange ratein response to depletion of forex reserves, with the magnitude and durationof rupee weakness depending on when Pakistan signs up to a (InternationalMonetary) Fund program – or manages to arrange foreign exchange reserves-bolstering hard currency from alternate sources.”

Rupee lost 10 percent of its value against dollar since December 2017.

The brokerage said the country’s external financing requirements wouldincrease in the medium-term as large energy import requirements displaceChina-Pakistan Economic Corridor -related machinery imports, and as “a humpin debt repayments kick in”.

“The gross external financing requirement is on target to be around $25billion for the full year,” it added. “The unfunded portion of the overallexternal gap is estimated to be around $12 billion for the current fiscalyear, which could represent a drawdown of official reserves if it remainsunfinanced.”