Rupee's depreciation continues as dollar strengthens globally

• Rupee continues to lose ground against dollar.
• Rupee depreciates 1.26 or 0.57% to 221.92.
• Pressure will continue till IMF deal is finalised.

KARACHI: The Pakistani rupee's free fall continued against the US dollar on Monday amid the persisting political turmoil in the country and the global strengthening of the greenback.

The rupee depreciated 1.26 or 0.57% to 221.92 against the dollar in the interbank market, up from Friday's close of 220.66, according to data from the State Bank of Pakistan (SBP).

The US dollar climbed to a 20-year high against other major currencies on Monday after Federal Reserve Chair Jerome Powell signalled interest rates would be kept higher for longer to bring down soaring inflation.

The dollar index, which measures the currency's value against a basket of peers, scaled a fresh two-decade peak of 109.48.

That left its European peers in the doldrums even as hawkish European Central Bank comments boosted expectations for a supersised September rate hike.

The euro was down a quarter of a percent in early European trade at $0.99415, within sight of recent 20-year lows, while Britain's pound sank to a 2-1/2 year low.

Meanwhile, economic experts have said that till Pakistan finalises the International Monetary Fund (IMF) deal, the pressure on the rupee will persist.

Once Pakistan gets the loan from the IMF, experts are predicting that the country will get additional funds from multilateral and bilateral organisations — giving a further boost to the depleting forex reserves.

The Fund's Executive Board meeting will take place in Washington later today, where it will take up Pakistan's request for releasing the $1.17 billion loan tranche.

Apart from the pressure of the IMF, the government has also lifted the months-long ban on the import of luxury items and the exports have not increased at desired pace — resulting in pressure on the rupee.

Moreover, the UAE has made it mandatory for Pakistani travellers to declare 5,000 dirhams at the airport when landing — leading to an increase in the price of the US dollar in the open market.