The Pakistani rupee depreciated by Rs0.60 to an all-time low of Rs188.66 against the US dollar in the interbank market on Tuesday as looming uncertainty over the resumption of the International Monetary Fund (IMF) loan programme took a toll on the local unit.
The local currency surpassed its April 7 record low of Rs188.18.
Currency dealers believe that a delay in the IMF programme, lack of immediate financial support from friendly countries, depleting foreign exchange reserves and surging trade deficit kept the pressure on the domestic currency.
The new government’s reluctance to remove subsidies on fuel and electricity — which are the pre-conditions for the revival of the IMF programme — dampened investors’ sentiment.
Moreover, investors are concerned about the falling foreign currency reserves — as the inflows from remittances and export proceeds are not sufficient to meet the market demand — and growing external debt payments and soaring imports. This is putting pressure on the rupee.
There is also ambiguity over the financial support from Saudi Arabia, UAE and China. The political temperature was also rising following the former Prime Minister Imran Khan’s announcement that he would march with his supporters to Islamabad after May 20 to demand new elections.
During the last 52 weeks, rupee lost 19.11 percent against the greenback, reached its lowest at 188.67 today, and touched its high of 152.59 on May 17, 2021.
Furthermore, the local unit has weakened by 7.06 percent since its high on May 17, 2021, against Euro. While, it has dropped by 7.44 percent against British pound since its high on May 17, 2021.
Within the open market, PKR was traded at 188/189.50 to US dollar.
Meanwhile, the currency lost 2.2 rupees to the pound as the day’s closing quote stood at Rs232.47, while the previous session closed at PKR 230.25 per pound.
Similarly, PKR’s value weakened by 2.4 rupees against Euro which closed at PKR 199.38 at the interbank today.