KARACHI: The Pakistani rupee fell Rs1.65 to make an all-time low of Rs194.18 on Monday owing to uncertainty over the talks with the International Monetary Fund (IMF) after the government decided to maintain the subsidy on fuel prices.

The local unit fell Rs1.65 to close at Rs194.18 to the dollar from Friday’s closing of Rs192.53 in the interbank foreign exchange market. The rupee recorded the previous historic low of Rs192.53 on May 13, 2022.

The rupee started the week with a loss after witnessing a continuous decline during the previous week due to the worsening economic indicators coupled with the political noise, the dealers said.

The government maintained the subsidies on fuel and power consumption which could further stall the talks with the International Monetary Fund (IMF) for the revival of the Extended Fund Facility (EFF), they added.

The rollover of Chinese and Saudi Arabia’s loan are also delayed, further creating panic in the market where the demand for the dollar is on a continuous rise for import payments.

Although the country received record remittance of $3.1 billion during the month of April, the declining forex reserves in the face of minimal growth in the exports and rising import bill have kept the rupee under pressure.

Pakistan’s forex reserves dwindled to a 22-month low. The country’s foreign exchange reserves dropped to their lowest level since December 2019 at $16.3 billion in the week ended May 6.

The country’s reserves declined by $178 million to $16.376 billion. The reserves held by the central bank decreased another $190 million to $10.31 billion.

The widening current account deficit is another vital factor in the escalation of the dollar value. Pakistan’s trade deficit showed a sharp growth to $3.64 billion in March 2022, registering an increase of 12 per cent over the same month of the last fiscal.

The total trade deficit escalated to $35.52 billion in the first nine months (July-March) period of the current fiscal year against $20.8 billion in the same period last fiscal year.

The local currency remained under pressure since the start of the current fiscal year. The rupee lost Rs36.64 or 23.25 per cent from Rs157.54 to dollar on June 30, 2021 to the current level of Rs194.18.

At the open market, the buying and selling of the dollar was recorded at Rs193 and Rs195 at 4:00pm PST.