Rupee dives to record low in intra-day trading

Pakistani currency plummeted by a staggering Rs2.02 (or 1.2%) against the US dollar to a record low of Rs173.2 during intra-day trading in the inter-bank market on Monday.

"The uncertainty regarding resumption of the International Monetary Fund (IMF) loan programme mounted pressure on rupee," Taurus Securities Head of Research Mustafa Mustansir said while taking to The Express Tribune.

The rupee had closed at Rs171.18 on Friday, according to the data from the State Bank of Pakistan (SBP).

The local currency nosedived on conflicting reports pertaining to the ongoing talks between Pakistan and the International Monetary Fund (IMF).

"Although the Ministry of Finance has stated that talks are headed in the positive direction, market rumours point towards roadblocks in optimistic conclusion of the discussion," he said.

Successful negotiations would allow Pakistan to resume IMF's $6 billion loan programme which is on hold since June.

This is for the second time that Pakistan and IMF are holding talks to resume the programme.

As a pre-condition to revive the bailout program, Pakistan has already increased the power tariff by Rs1.37 per unit.

"Clarity on the talks would stabilise rupee," Mustansir said.

The rupee has declined by a substantial 13.75% (or Rs20.93) against the greenback in the past five months compared to the 22-month high value of Rs152.27 recorded in May.