KARACHI: The Pakistani rupee slumped to the historic low of Rs208.74 against the dollar on Friday as uncertainty regarding the International Monetary Fund (IMF) programme dented the investors and traders’ confidence.

The local unit fell Rs1.07 to close at Rs208.74 to the dollar from Thursday’s closing of Rs207.67 in the interbank foreign exchange market.

The dealers said that the free-fall in the value of rupee continued as the negotiations between the government and the IMF remain uncertain which is creating panic in the market, besides a delay in the rollover of the Chinese loan programme.

Foreign payment and a significant decline in the foreign exchange reserves of the country also kept the local unit under pressure, while an increasing demand for the greenback was witnessed for import payment due to fiscal year’s end which had a multiplier effect on the value of rupee, they added.

The local currency has been on a downward spiral despite various measures by the government as it announced a complete ban on imports. However, these measures failed to provide any support to the local currency 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 $241 million to $8.98 billion during the week ended June 10, compared with $9.22 billion on June 3.

The overall liquid foreign currency reserves held by the country, including net reserves held by banks other than the SBP, stood at $14.94 billion while the net reserves held by banks amounted to $5.95 billion.

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 Rs51.20 or 32.49 per cent from Rs157.54 to dollar on June 30, 2021 to the current level of Rs208.74.

At the open market, the buying and selling of the dollar was recorded at Rs209 and Rs211 at 5:15pm PST.