Pakistani rupee falls to a historic low, Political instability a factor
text_fields
The Pakistani rupee has hit another historic low against the US dollar. It is now being traded at Rs 195.74. Since July 2021, the rupee has collectively dropped by a massive 24.24% (or Rs 38.2).
It is at the weakest level nearing the threshold of 196 in the interbank market. A persistent delay in the receipt of the next tranche of $1 billion from the International Monetary Fund (IMF) is increasing pressure, reported Geo News.
Commodities Director Adnan Agar said the situation is likely to remain uncertain for the local currency. "If the government decides to remove subsidies on petroleum products, the rupee will bounce back". He added that the value of the local unit will still remain within the range of 180-185.
He noted that if the government decided to dissolve the Assembly and move towards early elections, the currency market will further worsen.
Pak Prime Minister Shehbaz Sharif held an online meeting with Exchange Companies Association of Pakistan (ECAP) Chairman Malik Bostan yesterday. He was informed that trade deficit, delay in the tranche loan from the IMF, political instability, and excessive borrowing were reasons for the fall of the currency.
Bosan said importers are opening more Letters of Credit but exporters' inflows are low. The demand in the interbank market has increased and supply has decreased due to this, reported Geo TV.
He added that exchange companies are not increasing the dollar rates and the dollar rate in the free market cannot be reduced until the rate in the interbank market is reduced.
