Pakistani currency has come close to an all-time low in freefall on the eleventh successive working day, as it freshly dropped 0.41% (Rs0.96) to close at a six-week low at Rs236.84 against the US dollar in the interbank market on Friday.
The domestic currency is just Rs3.10 away from the all-time low, hit at Rs239.94 six weeks ago on July 28, 2022.
The rupee has maintained a downturn on a lack of government plans and actions to support the rupee and stabilise the dwindling economy amid high political noise in the country.
Cumulatively, it has slumped 10.36% (or Rs22.24) in the past eleven working days to Rs236.84 compared to Rs214.60 on August 1, 2022.
It had closed at Rs235.88 against the greenback on Thursday, according to the central bank.
“Markets want to see concrete steps and at the moment there is no strategy for the local currency. In such void like scenario, the rupee will continue to drop without a bottom,” Tresmark Chief Executive Faisal Mamsa said in a comment to The Express Tribune.
The latest drop in the currency is seen following the country’s foreign exchange reserves depleted by $176 million to $8.62 billion.
The continuous drop in reserves in the wake of elevated import payments and foreign debt repayments has mounted pressure on the rupee. The reserves have maintained at a critically low level at around six-week import cover despite the receipt of an International Monetary Fund (IMF) loan tranche worth $1.16 billion some two weeks ago.
The increased inflow of workers’ remittances at $2.72 billion in August – that were 8% higher compared to $2.52 billion in July – also failed to arrest the downturn in the rupee and stabilise foreign exchange reserves.
There was high hope that the resumption of the IMF loan programme would help the rupee stabilise and recover against the greenback. However, the heavy rainfall and flash flood have opened new challenges for the domestic economy.