KARACHI: The rupee plunged to a historic low of Rs195.75 against the dollar on Tuesday, as the government failed to make important decisions to support the ailing economy.

The exchange rate witnessed a loss of Rs1.57 to end at Rs195.75 from the previous day’s closing of Rs194.18 in the interbank foreign exchange market.

Currency dealers said the delay in the government decision to support the economy has resulted in further rupee depreciation.

The dealers suspect the International Monetary Fund (IMF) would delay its tranche of $1 billion under the Extended Fund Facility (EFF) to Pakistan, as the government again avoided withdrawing the subsidy on fuel and electricity prices.

Besides, the foreign exchange reserves of the country fell sharply during the last few months to further weaken the balance of payments position.

Pakistan’s foreign exchange reserves fell $177 million to $16.38 billion by the week ended May 6, 2022. The foreign exchange reserves of the country were $16.55 billion by the week ended April 30, 2022. The country’s foreign exchange reserves hit a record high of $27.23 billion by the week ended August 27, 2021.

Since then, the foreign exchange reserves have depleted by $10.852 billion.

The official forex reserves of the State Bank of Pakistan (SBP) witnessed a decline of $190 million to $10.31 billion by the week ended May 6, 2022, compared with $10.50 billion a week ago. The SBP’s foreign exchange reserves reached a record high of $20.15 billion by August 27, 2021.

The official forex reserves also fell $9.84 billion after reaching a record high.

The import bill of the country surged 46.41 per cent to $65.49 billion during the first 10 months of the current fiscal year, compared with $44.73 billion in the corresponding months of the last fiscal year.