Political uncertainty takes a toll: Pakistani rupee breaks all previous records against US dollar

• Rupee closes at Rs183.48 against US dollar.
• During March, rupee has depreciated by 3.38% against US currency.
• Analyst says political uncertainty is taking a toll on the currency.
  

KARACHI: There was no respite for the falling Pakistani currency as the rupee continued to decline against the US dollar, amid the ongoing political uncertainty and delays in economic decisions, especially lingering talks with the International Monetary Fund (IMF).

The currency surpassed the Rs183-mark for the first time in the history of Pakistan, shedding over Rs25 since the start of the ongoing fiscal year 2021-22.

The rupee closed at Rs183.48 against the US dollar in the inter-bank market on Thursday.

During the month of March, the rupee has depreciated by 3.38% (or Rs6.07) against the US currency.

According to the State Bank of Pakistan (SBP), the local currency closed the session on Wednesday at Rs182.64 in the inter-bank market.

Speaking to Geo.tv, Arif Habib Limited Head of Research Tahir Abbas said that the political uncertainty is taking a toll on the currency.

“Political uncertainty is taking a toll on the financial markets of Pakistan,” he said, adding that the pressure on the country’s foreign exchange reserves pushed by the draining of dollars from stocks and government securities (like T-Bills) has also played havoc with the rupee value.

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

The Pakistani rupee has depreciated by 16.46% (or Rs25.94) 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 20.49% (or Rs31.21) to date, compared to the 22-month high of Rs152.27 recorded in May 2021.

Other currency dealers also mentioned that political uncertainty has created a negative sentiment overall for the economy and this has been impacting adversely the rupee value against the greenback.

They also attributed import payments as a factor contributing to the fall of the rupee.

“Dollar demand is on the rise due to import payments, and the country is spending more on imports because of high prices of energy and commodities in the global market,” they said.

Abbas noted that currency is expected to lose value will political uncertainty eases. The analyst predicted that the local unit will trade in a range of Rs180-185 by the end of this fiscal year.

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