KARACHI: The Pakistani rupee declined Rs1.12 to hit an all-time low of Rs188.65 against the dollar on Tuesday amid depleting forex reserves on the back of external debt repayment and the uncertainty regarding the International Monetary Fund (IMF) programme.
The local unit fell Rs1.12 to close at Rs188.65 to the dollar from Monday’s closing of Rs187.53 in the interbank foreign exchange market.
The rupee’s previous historic low of Rs188.18 was recorded on April 7, when the country faced the worst political crisis resulting in uncertain economic conditions.
The dealers said that the latest historic low of the local currency against the greenback was due to the record low forex reserves of the State Bank of Pakistan (SBP). The Central Bank’s reserves recorded a decline of $59 million to $10.5 billion during the week ending April 30. The reserves held by commercial banks fell to $6.0 billion.
Pakistan’s foreign exchange reserves fell by $115 million during the week ending April 30, on the back of increasing external debt payments and higher current account deficit.
The total liquid foreign reserves held by the country stood at $16.5 billion, compared with $16.6 billion in the previous week.
The market remained under pressure as the uncertainty surrounded the government’s talks with the IMF for the revival of the loan disbursement programme, the dealers said.
Additionally, higher demand for the dollar for import payments from the importers, soaring trade and current account deficit and reduced inflows have also played a significant role in the depreciation of the value of the rupee against the greenback, they added.
The ballooning current account deficit is another reason for escalation in the dollar value. Pakistan’s current account deficit ballooned to $12 billion during the first eight months (July – February) 2021/22 against a surplus of $994 million in the corresponding months of the last fiscal year.
The local currency remained under pressure since the start of the current fiscal year. The rupee lost Rs31.11 or 19.74 per cent from Rs157.54 to dollar on June 30, 2021 to the current level of Rs188.65.
At the open market, the buying and selling of the dollar was recorded at Rs186 and Rs190 at 4:00pm PST.