Rupee sinks further, falls to new low of 178.17

• Rupee has lost nearly Rs26 against the greenback to date, compared to the 22-month high of Rs152.27 recorded on May 14.
• Currency dealers link rupee’s path with sixth review of the $6bn EFF for Pakistan.
• “The rupee’s path will largely depend on how positive the response the country gets from the IMF board,” a dealer says.

KARACHI: The Pakistani Rupee reached a new record low on Monday, selling at 178.17 against the dollar in the interbank market to continue a slide that has seen it lose nearly 17% since May.

On Tuesday, the local currency recorded a minimal decline of 0.02% against the US dollar due to the widening current account deficit.

The rupee has maintained the downtrend for the past seven months. It has lost 17% (or Rs25.9) to date, compared to the 22-month high of Rs152.27 recorded on May 14.

With a fresh decline of 0.06%, the rupee has depreciated by 13.09% (or Rs20.63) since the start of the current fiscal year on July 1, 2021, data released by the central bank revealed.

Earlier, currency dealers linked the rupee’s path with the sixth review of the $6 billion Extended Fund Facility (EFF) for Pakistan that will be taken up by the executive board of the International Monetary Fund (IMF) on January 12.

“The rupee’s path will largely depend on how positive the response the country gets from the IMF board on the sixth review is,” a dealer had said.

According to a report published in The News, the rupee will probably cut some of its losses against the US dollar in the ongoing week ahead of IMF’s sixth review on the loan programme, but it’s likely to stay weak on ballooning trade and current account deficits.

A sharp rise in imports fuelled by global commodity prices and stronger domestic demand widened the trade deficit and resulted in the weakening of the local currency.