Rupee remains on ropes vs dollar as cap removal toll worsens

• Local unit closes at an all-time low of 269.63.
• ECAP data shows rupee settles at 275 in open market.
• Rupee has cumulatively slumped by Rs38.74 in the three days.

The rupee continued to lose its value on Monday and closed at an all-time low of 269.63 against the dollar in the interbank market.

The local currency, which had closed at a record low of Rs262.6 on Friday, fell Rs7.03 to a dollar or 2.61% today, according to the State Bank of Pakistan. 

The current spell of depreciation came after the coalition government ended its control on its price in order to woo the International Monetary Fund (IMF) officials to revive the $7 billion loan programme.

With the latest drop, the domestic currency has cumulatively slumped by 14.36% or Rs38.74 in the three days, compared to Wednesday’s close of Rs230.89 to a dollar, according to the State Bank of Pakistan (SBP) data.

In over two hours of today's trading session, the currency hit an intra-day low of Rs270 during the day, according to the Exchange Companies Association of Pakistan (ECAP).

Meanwhile, the association reported that the currency was changing hands with the dollar at 275 in the open market.

The ECAP in its briefing mentioned that most analysts are of the view that the rupee will weaken to 275, and then consolidate towards the 270 level as IMF approves the programme.

The association, however, predicted that the market will struggle to go above 270 in the short term, correcting to 265 levels, if there is no negative news on the IMF or the political front.