KARACHI: The Pakistani rupee fell Rs2.77 to touch the historic low of Rs202.83 against the dollar on Tuesday as speculation regarding the upcoming budget and the government freezing foreign currency accounts intensified.

The local unit declined Rs2.77 to close at Rs202.83 to the dollar from Monday’s closing of Rs200.06 in the interbank foreign exchange market. The rupee recorded the historic low of Rs202.01 on May 26, 2022.

The dealers said that the rupee dived to historic low partly due to rumours that the government was considering freezing foreign currency accounts besides budget uncertainties which have mounted pressure on the local unit.

The budget presentation is scheduled for June 10 and the International Monetary Fund (IMF) will consider resuming its loan programme after seeing Pakistan implementing prerequisite commitments in the budget.

Additionally, the local unit also remained under pressure as the country made payments for oil imports.

Pakistan’s declining foreign exchange reserves are also a big threat to the economic stability which have been depleting at a faster pace.

The foreign currency reserves held by the State Bank of Pakistan’s (SBP) were down $366 million to reach $9.72 billion during the week ended May 27, compared with $10.08 billion on May 20.

The overall liquid foreign currency reserves held by the country, including net reserves held by banks other than the SBP, stood at $15.77 billion, while the net reserves held by banks amounted to $6.04 billion.

In another instance on June 2, global rating agency Moody’s downgraded Pakistan’s outlook from stable to negative, citing “heightened external vulnerability” and uncertainty around securing external financing to meet the country’s needs.

The widening current account deficit is another threat to the stability of the local unit. 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 Rs45.29 or 28.74 per cent from Rs157.54 to dollar on June 30, 2021 to the current level of Rs202.83.

At the open market, the buying and selling of the dollar was recorded at Rs202 and Rs204 at 4:00pm PST.