The Pakistani rupee on Thursday continued its downward slide against the US dollar as it dropped to an all-time low of Rs192 in the interbank market by midday during intraday trading.
The local currency continued its downward streak in line with the predictions of the analysts who fear more losses down the road as the country remains mired in political and economic instability.
According to the Forex Association of Pakistan, the dollar breached the 191-mark at the day’s start and soared to Rs192.20 around 11:45 am, appreciating by Rs2 from the previous day’s close of 190.20 — the record high value for the dollar before today’s session.
Asad Rizvi, the treasury head at Chase Manhattan Bank, told Mettis Global — a web-based financial data and analytics portal — that the Pakistani rupee had depreciated by nearly nine per cent against the dollar since the time of the Russian invasion of Ukraine to “hit all-time new lows”.
He further pointed out that the economic slowdown and higher oil prices as a result of the Russian offensive had also dented other currencies, including the Indian rupee, and accelerated inflation. And there was “no respite in sight”, he said.
The local currency surpassed the critical threshold of 190 a day earlier amid a persistent decline in the foreign exchange reserves due to hefty current account and trade deficits, and higher debt payments.
The dried-up foreign currency inflows coupled with a delay in the revival of the International Monetary Fund (IMF) programme and a lack of financial support from friendly countries are adding to the pressure on the local unit.
Moreover, political unrest owing to PTI’s protest campaign against the government is eclipsing the new economic team’s focus on economic firefighting. Former prime minister Imran Khan has announced to march with millions of his supporters towards Islamabad after May 20 to demand new elections to add to the troubles of the economically-challenged PML-N led regime.
The market is also eyeing the outcome of Prime Minister Shehbaz Sharif and top PML-N leaders’ meeting with the party supremo Nawaz Sharif in London for any clues on when the new government would withdraw energy subsidies to restart IMF loan negotiations on May 18, and whether it will agree to announce fresh elections or not.
However, economist Kaiser Bengali on Twitter said that early elections before inflation and dollar rates are stabilised will be a “disaster.”
Meanwhile, former finance minister Hafiz Pasha said that the only way to steer out of the economic crisis is to talk with IMF as soon as possible otherwise the value of the rupee could depreciate further.