Pakistani currency has maintained record-making downward streak on the fifth consecutive working day, as it freshly slumped 0.58% (or Rs1.21) on day-to-day basis to an all-time low at Rs207.67 against the US dollar on Thursday.
It hit an intra-day record low of Rs208.25 before partially recovering to close at Rs207.67.
It had closed at Rs206.46 against the greenback on Wednesday, according to the central bank.
The domestic currency has declined by 3.33% (or Rs6.69) in a free-fall in the past five successive working days.
The rupee has plunged 32% (or Rs50.13) in the current fiscal year to Rs207.67 on Thursday compared to Rs157.54 on June 30, 2021.
The latest drop in the currency is witnessed after the US central bank - Fed - increased its key interest rate by the 28-year high of 75 basis points.
The increase in the Fed rate is strongly expected to strengthen the US dollar against world currencies including the Pakistani rupee.
Besides, there are unconfirmed reports in the market that Pakistani exporters got some of their export orders cancelled, meaning the dollar supply is set to further reduce in the inter-bank market.
On top of that, “the inter-bank market is yet not confident that IMF would revive its ($6 billion) loan programme for Pakistan,” Uraan – a financial research firm – CEO Syed Atif Zafar said while talking to The Express Tribune.
The uncertainty on IMF programme has kept foreign exchange inter-bank and stock markets jittery. “There is no clear cut scenario and direction in the markets,” he said.
The revival of the IMF programme is a must to manage the balance of the international payment crisis.
The country’s foreign exchange reserves have depleted to critically low level of less than six-week import cover below $9 billion.
“It is yet 50:50 whether the IMF programme would get revived or not. The situation would get clear by end of June,” he said.
The government has taken a number of measures on the directive of the International Monetary Fund (IMF). It has completely withdrawn subsidies on petroleum products to agree on the global lender to revive its programme.
Published in The Express Tribune, June 17th, 2022.
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