In a first, rupee breaches Rs185-mark over looming political uncertainty, stalled IMF programme

• Pakistani rupee closes at Rs185.23 in interbank market.
• "Pakistani rupee is depreciating because of uncertainty regarding continuity of IMF programme," analyst says.
• Currency dealers sys rupee is expected to remain under pressure in the coming week.

KARACHI: The Pakistani rupee plummeted to an all-time low against the dollar on Tuesday, closing at Rs185.23 in the interbank market during intraday trading, down Rs1.14 from Friday’s 184.09.

The local currency surpassed Rs185-mark for the first time in the history of Pakistan. The rupee has declined by nearly Rs7 against the greenback in the last month.

The Pakistani rupee has maintained its slump mainly because the US dollar is gaining strength against other major global currencies for the past few days. However, the recent decline came on the back of the uncertain political situation and stalled International Monetary Fund (IMF) programme.

Speaking to Geo.tv, Pakistan-Kuwait Investment Company Head of Research Samiullah Tariq said: “Pakistani rupee is depreciating because of uncertainty regarding the continuity of the IMF programme, which is dependent on the formation of the caretaker govt.”

A day earlier, in a brief statement, the Fund assured that it would continue to provide support to the “new formed government” and will involve in policy talks with them to enquire about their intentions about the loan.

Since the beginning of the current fiscal year, the rupee has dropped a massive 17.57% (or Rs27.69) as compared to the previous fiscal year’s close at Rs157.54 on June 30, 2021. 

Meanwhile, the rupee has maintained a downtrend for the past 12 months. It has lost 21.64% (or Rs32.96) to date, compared to the 22-month high of Rs152.27 recorded in May 2021.

Meanwhile, other currency dealers said the rupee is expected to remain under pressure in the ongoing week on the unending political showdown in the country.

They said the demand for the dollar is normal in the market for import payments, which have become costlier on high prices of energy and commodities in the international market.

However, international donor institutions were watching the political situation in the country keenly. They would not decide until the political dust is settled, a dealer said.

Pakistan’s negotiations with IMF are also stalled and put on hold for the third time since the programme started in 2019 because of the political crisis in the country as the international institution would wait until the situation becomes clear on the political front.

Meanwhile, open market forex rates of other currencies against the Pakistani rupee are as follows: