Pakistani rupee continues to slide, reaches another record low

• Analysts believe prevailing political uncertainty is diverting govt’s attention to focus on rupee-dollar parity.
• Lack of clarity regarding outcome of negotiations between Pakistan and IMF is also putting pressure on local unit.
• Rupee fell past Rs182-mark against US dollar on March 28.

KARACHI: The Pakistani rupee continued to lose ground and fell to an all-time low of Rs182.64 against the US dollar in the inter-bank market on Wednesday.

Analysts believe that prevailing political uncertainty in the country was diverting the government’s attention to focus on the dollar and rupee parity in the country.

They said the lack of clarity regarding the outcome of negotiations between Pakistan and the International Monetary Fund (IMF) was also putting pressure on the local unit.

The Pakistani rupee has depreciated by 15.9% (or Rs25.1) since the start of the current fiscal year on July 1, 2021, data released by the central bank revealed.

The rupee has maintained a downtrend for the past 11 months. It has lost 19.94% (or Rs30.37) to date, compared to the 22-month high of Rs152.27 recorded in May 2021.

The local currency is facing double pressure as it is losing ground due to the challenges in the national economy owning to political crisis coupled with the appreciation of the US dollar against world currencies.

Read more: Political crisis pose downside risks to Pakistan's economic recovery, says finance ministry

Earlier, speaking to Geo.tv, Pakistan-Kuwait Investment Company Head of Research Samiullah Tariq had said that the current round of depreciation was caused by “outflows by foreigners from the government securities.”

“In terms of the real effective exchange rate (REER) we are very competitive now,” he had said, predicting that the rupee would stabilise after the end of March as quarter-end payments would also be completed.

The local unit fell past the Rs182-mark against the US dollar on March 28 for the first time in the interbank market in the history of Pakistan.

Earlier, Alpha Beta Core CEO Khurram Schehzad had said that political uncertainty is taking a toll on the local currency.

Read more: Pakistan’s debt-to-GDP ratio highest in CAREC region, reports ADB

“Whenever there is uncertainty in the country all commodity markets including, the currency market and stock exchange face the wrath of the unrest,” he had said, adding that rising commodity prices in the international market is also impacting the movement of the local currency.

The analyst further predicted that the movement of the rupee against the greenback is expected to remain downward till the end of the fiscal year 2021-22.

Meanwhile, open market forex rates of other currencies against the Pakistani rupee are as follows: