KARACHI: Maintaining its downturn for the ninth consecutive session, the Pakistani rupee tanked to 198.39 against the US dollar to hit its new weakest level on Wednesday.
The State Bank of Pakistan said in a statement that the rupee opened at 195.74 against the US dollar in the interbank market and closed at 198.39 after shedding Rs2.65 (-1.34 percent). Within the open market, the rupee was traded at 200/201 per dollar against 197/198 a dollar on Tuesday last.
The rupee has set seven consecutive all-time lows during the last seven sessions. The local unit has shed Rs5.86 during the last three days against the US dollar after losing Rs5.90 during the last week. Overall, the rupee has depreciated by Rs40.90 against the US dollar during the ongoing fiscal year 2021-22 and Rs22.08 during the current year 2022.
The government began talks with the International Monetary Fund (IMF) on Wednesday over the release of crucial funds, a process slowed by concerns about the pace of economic reforms in the country. Pakistan has repeatedly sought international support for its economy, which has been hit by crippling national debt, galloping inflation and a plummeting rupee. The talks are being held in the Qatari capital Doha, the Ministry of Finance said, and are expected to continue into next week.
The industry experts believe the country is desperately in need for the revival of the programme to avoid increasing the risk of defaulting on international payments, specifically on imports and foreign debt repayments. The country’s foreign exchange reserves have depleted to critically low levels, indicating only six weeks of import cover as compared to the usual three-month import cover. The uncertainty resulted in importers panic buying the foreign currency against limited supplies, as exporters opted to delay receiving their payments from foreign buyers on speculation that the rupee may test around Rs200 soon.
The widening gap between demand and supply of the foreign currency has mounted pressure on the rupee. Experts believe that the government should either take tough decisions to deal with the growing economic crisis or announce snap elections. – TLTP