Rupee remains volatile as USD crosses 211

Traders resort to panic buying on reports that some commercial banks had run out of USD

KARACHI:

The Pakistani rupee remained highly volatile as it plunged to a record low of over Rs211 against the US dollar in the inter-bank market on Monday.

The US dollar was available at Rs211.21 at 11:03 am and had closed at Rs208.75 on Friday, according to the State Bank of Pakistan (SBP).

The latest fall in the rupee's value against the USD comes after traders resorted to panic buying on reports that some commercial banks had run out of the foreign currency.

Businessmen have urged the SBP to play its due role in controlling the free-fall of the rupee. However, the central bank seemed helpless to control the situation as it cannot supply dollars in the market to support the rupee since its own stock of dollars also stands at a depleted level.

Pakistan's foreign exchange reserves (maintained with the SBP) have depleted to a critical level and the country has less than six weeks of import cover remaining. The reserves are currently below $9 billion.

The country is fulfilling the prerequisite conditions to revive the IMF loan programme to avoid default on international payments.

Finance Minister Miftah Ismail also sought help from the US to revive the IMF programme after the lending institution put stringent conditions for the programme's revival.

Experts said the situation would get clear by end of June whether the IMF would resume its loan programme or not.

The rupee has devalued by a massive 34% (or Rs53.67) in the past year. It closed at Rs157.54 on June 30.