Monday Jun 13, 2022
KARACHI: The Pakistani rupee on Monday continued its downward slide against the US dollar as it broke all previous records by plunging to an all-time low of 203.86 in the interbank market.
With a fresh decline of Rs1.51 (or 0.74%), the local currency closed at Rs203.86 against the greenback in the interbank market, surpassing its previous record low of Rs202.83 recorded on June 7.
The local currency continued its downward streak in line with the predictions of the analysts who fear high dollar demand for import payments ahead of fiscal year-end would keep the rupee under pressure.
The rupee dived today as a relentless surge in global crude oil prices raised concerns about a sustained rise in imported inflation and widening current account deficit, while fast-depleting foreign exchange reserves were also hurt.
Since the beginning of this fiscal year (July 1, 2021) to date, the rupee has collectively dropped by a massive 29.40% (or Rs46.32) compared to the previous fiscal year’s close at Rs157.54.
The rupee has maintained a downward trend for the last 13 months. It has lost 33.88% (or Rs51.59) to date, compared to the record high of Rs152.27 recorded in May 2021.
Meanwhile, the rupee closed at 205 against the greenback in the open market, Forex Association of Pakistan data showed.
The volatility in the exchange rate came after a statement by Finance Minister Miftah Ismail on Saturday wherein he had talked about a delay in the revival of the bailout package by the International Monetary Fund (IMF).
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Miftah had said the IMF may have several objections to the federal budget 2022-23 presented in the National Assembly on Friday. Earlier, the minister had, however, said that the IMF programme was expected to resume after the budget.
The country's foreign exchange reserves have depleted to a critically low level of six-week import cover at $9.2 billion. A boost in the reserves is necessary to stabilise the rupee and avoid worsening the balance of the international payment crisis.
Speaking to Geo.tv, Alpha Beta Core CEO Khurram Schehzad said that the last quarter, particularly the last month, the of the fiscal year is always difficult for the currency market as the currency remains under pressure during the month because of import payments.
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The analyst was of the view that as soon as the IMF comes on board and China deposits a $2.4 billion loan local currency will stabilise against the greenback.
Schehzad also mentioned that the US currency is also strengthening against other countries.