KARACHI: The Pakistani Rupee touched a critical threshold of 200 against the US dollar in interbank trading on Thursday morning, shedding Rs1 amid increasing political pressure on the government to announce snap polls.
According to Forex Association of Pakistan (FAP), with a fresh decline of Rs1.81 or 0.91 per cent, the local currency was trading at Rs200.20 – an all-time high – against the greenback at 10:13am during intraday trade.
A day ago, the greenback had made a significant gain of more than Rs2 from Tuesday’s close and settled at Rs199 at the session’s end, which was the latest in a string of record highs that the US currency has been hitting since last Tuesday.
While the FAP recorded the previous day’s closing rate at Rs199, data released by the State Bank of Pakistan stated the closing rate as Rs198.39. The dollar’s value already reached Rs200 in the open market yesterday.
The domestic currency has maintained the trend of making and breaking records for the eighth consecutive working day as it cumulatively lost nearly 8% or Rs15 in the last ten sessions.
The currency hit a record low of Rs188.66 on May 10. It then plunged to Rs190.02 on May 11, fell over Rs191 on May 12, reached Rs192.52 on May 13, sank below Rs194 on May 16, down to Rs195.74 on May 17 and closed at Rs198.39 yesterday (May 18).
It is worth mentioning that the country follows a market-based exchange rate where the currency moves are determined by the market forces of demand and supply.
In recent weeks, rising oil prices have already doubled the country’s oil import bills and the overall imports are also at a record high. In April, imports increased by 72pc, leaving no room for the government to improve its external balance.
Moreover, the foreign exchange reserves of the central bank have touched $10.3bn, lowest since June 2020. Currency dealers say the unexpectedly high imports bill and low foreign investment were not in support of the exchange rate while over $13bn current account deficit was already there as a challenge for the government.
The development comes as Pakistani officials resumed negotiations with the IMF yesterday, in which Finance Minister Miftah Ismail sought to clear uncertainty on two counts — that the new coalition government would stay in office and take tough decisions, undertake reforms committed in the original fund programme and complete structural benchmarks.
PM Shehbaz takes notice of dollar flight
Meanwhile, Prime Minister Shehbaz Sharif has taken notice of the continuous depreciation of the rupee against the US dollar. The premier will convene an important meeting today on the economic situation to discuss issues related to preventing the currency from devaluing.
During the meeting, which would be attended by the officials from the Ministry of Finance, Federal Board of Revenue and Ministry of Commerce, the premier will be apprised of the situation regarding imports and exports of the country.
According to the directives issued by PM Shehbaz, relevant authorities will present an implementation report on the decision regarding the ban on importing non-essential items.
