KARACHI: The Pakistani rupee sank to an all-time low against the dollar Friday on high oil prices and forex reserve fears as the country prepared to repay nearly $400 million to the International Monetary Fund.
The rupee fell to 94.75 to the greenback in trading in Karachi on Friday, down from 94.70 on Thursday, and has now lost 33 percent of its value against the US currency since March 2008.
"The increase in the international oil price... has affected Pakistan's foreign exchange reserves and they could suffer further with the repayment of IMF's installment due today," said analyst Mohammad Sohail of Topline Securities.
"These factors have contributed to the panic in the currency market."
In Asian oil markets on Friday, Brent North Sea crude for October delivery stood at $114.54 a barrel, while New York's main contract, light sweet crude for delivery in October was at $95.68.
An official in the Ministry of Finance said Pakistan was set to pay $397 million to the IMF on Friday and hoped it would have a "minimal effect" on the forex reserves, which stand at $15.18 billion, according to the central bank.
The official said Pakistan has already repaid $901.4 million to the IMF in three installments.
The Washington-based fund bailed out Pakistan with an $11.3 billion loan package launched in November 2008 as the country faced 30-year-high inflation rates and fast-depleting reserves, as well as a deadly insurgency.
Sohail said the panic in the currency market may continue next week, if the international oil and commodity prices do not stabilise to a comfortable level.
COMMENTS (14)
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My vision is that US$ 1 should come equivalent to Pak Rupee 1.
A food for thought for our Economic Mangers.
As I write this I note the following exchange rates to the US Dollar: Pakistan Rupee is 94.9 Indian Rupee is 55.5 and Bangladesh Taka is 81.4 At one point in time the above currencies were all same. This merely proves that the Pakistan rupee is the weakest of the lot. It reminds me of Ernest Hemingway who famously said: "The first panacea for a mismanaged nation is inflation of the currency; the second is war. Both bring a temporary prosperity; both bring a permanent ruin. But both are the refuge of political and economic opportunists." He could not have said it better. It just sums up the poor state of the Islamic Republic of Pakistan today. By end of the year it will be 100 rupees and falling.
@Notanindiantroll: Bad news for the corrupt elit who are willing to transfer funds abroad which are earned by unfair means.
Great news for exporters.
Jiye bhuto, Jiye zardari.
The consequences of making your economy COMPLETELY dependent of foreign AID.
LOL at above comments, add mine, too, GOOD news for those abroad.
Long live Zardari & associates.
Failed economy, failed infrastructure, failed railways and airlines, failed foreign policy, failed social structure, failed education, failed governance...getting added to that list... a failing currency. Can anything happen here?
Good news for us exporters!
Great! Thank God I earn in Dollars haha.
Unleash the uninformed opinions on how in Musharafs era Rs 60 to $1 was an era of economic glory and just because the Rupeee "falls" that supposedly means its a bad thing!
It will sink further the way the economy of the country is being run by the present government. Expect at around Rs 100 by December
This is good for pakistanis based abroad. Time for remittences to surge!