KARACHI: The Pakistani rupee continued to depreciate as the United States dollar (USD) surpassed Rs189 in the interbank trade.
The dollar was being quoted at 188.97/189.02 (1:18 PST) on Thursday when compared to the previous day’s close of 186.13. The Pakistani currency recorded a sharp drop of Rs3.39 and plunged to an all-time low of Rs189.51 against the US dollar in intra-day trading
Furthermore, the rupee dropped beyond Rs190 in the open market because only a nominal amount of the foreign currency is available for buying by individuals.
According to the Forex Association of Pakistan (FAP), the greenback appreciated by Rs3 over Wednesday’s close of Rs186.13 to reach a new high of Rs189.25 in the interbank market today. Earlier on Wednesday, the dollar had closed 90 paisa up from Tuesday’s Rs185.23.
The trend that is largely attributed to the stalling of an International Monetary Fund (IMF) loan facility, rising imports and exapnding current account deficit. The State Bank of Pakistan (SBP) also hiked the interest rate by 250 basis points to 12.25 percent.
The central bank also refrained from intervening in the market to rescue the sinking rupee. The country’s foreign exchange reserves have depleted rapidly over the past six to seven weeks to a two year low of $12 billion.
The IMF once again placed its $6 billion bailout programme on hold until a new government is formed. Besides, Pakistan’s trade deficit shot up 70% to $35.5 billion in the first nine months of current fiscal year 2022 which added to the depreciation.
