KARACHI: The Pakistani rupee touched the historic low of Rs207.67 against the dollar on Thursday on the back of stalled International Monetary Fund (IMF) programme besides depleting foreign exchange reserves of the country.
The local unit shed Rs1.21 to close at Rs207.67 to the dollar from Wednesday’s closing of Rs206.46 in the interbank foreign exchange market. The rupee recorded the previous historic low of Rs206.46 on June 15, 2022.
The dealers said that the local currency dived to the fresh low against the greenback as the government is yet to have any success in the resumption of the IMF programme to stabilise the declining forex reserves of the country.
Additionally, foreign payments and a significant decline in the foreign exchange reserves, besides a hike in the global commodity prices also resulted in the rupee depreciation, they added.
Previously, the government announced a complete ban on imports in a bid to support the balance of payments position and provide some stability to the local unit. However, these measures had little to no effect as the flight of the greenback continued in the interbank market due to a sharp decline in the forex reserves of the country.
The official foreign exchange reserves of the State Bank of Pakistan (SBP) declined $497 million to reach $9.22 billion by the week ended June 3, 2022, compared with $9.72 billion a week ago.
Previously, the foreign exchange reserves held by the central bank were recorded at $9.23 billion on December 6, 2019.
The foreign exchange reserves held by the central bank witnessed a record high at $20.14 billion by the week ended August 27, 2021. Since then, the central bank’s foreign exchange has witnessed a continuous decline. The official reserves of the SBP fell around $10.92 billion by the week ended June 3, 2022 from touching the peak.
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 Rs50.13 or 31.82 per cent from Rs157.54 to dollar on June 30, 2021 to the current level of Rs 207.67.
At the open market, the buying and selling of the dollar was recorded at Rs206.5 and Rs 208.5 at 3:15 pm PST.
