Pakistani rupee fell to an all-time low of 172.78 against the US dollar on Monday, breaching Thursday’s low of 171.13, amid uncertainty regarding resumption of the International Monetary Fund’s (IMF) $6 billion Extended Fund Facility (EFF).
According to the State Bank of Pakistan, the rupee shed Rs1.60 (-0.93 percent) as the US dollar opened at Rs171.18 and closed at Rs172.78. During intra-day trading in the inter-bank market, the rupee plummeted by a staggering Rs2.02 (-1.2 percent) against the US dollar to a record low of Rs173.2; however, it recovered some loss before the close of the session. Within the open market, the rupee was traded at Rs172/173 per dollar.
Currency experts expressed the local currency nosedived on conflicting reports pertaining to the ongoing talks between Pakistan and the International Monetary Fund (IMF). They said although the Ministry of Finance has stated that talks are headed in the positive direction, market rumours point towards roadblocks in optimistic conclusion of the discussion. They were of the view that clarity on the talks will stabilise rupee.
They said that another reason for rupee depreciation was that the market opened after two weekly holidays and Tuesday is also a public holiday on account of Eid Milad-un-Nabi. They said the State Bank has taken a number of steps to ease the pressure on the exchange rate but the local currency continues to fall against the US dollar.
The central bank has earlier introduced regulatory measures to enhance transparency in the foreign currency transactions by exchange companies and curb undesirable outflow of foreign currency. Exchange companies will be required to conduct biometric verification for all foreign currency sale transactions equivalent to US$500 and above and outward remittances and it will be applicable with effect from October 22. The State Bank of Pakistan earlier issued guidelines that persons travelling to Afghanistan would be allowed to carry only $1,000 per person per visit with a maximum annual limit of $6,000.
The Pakistani rupee shed Rs0.65 during the last week against the US dollar, while depreciation during the fiscal year 2021-22 has been Rs15.36. The local unit has shed Rs12.51 against the US dollar in the current year 2021. The local currency has maintained a downtrend after it touched 22-month high of Rs152.48 in May 2021, losing a cumulative Rs20.47 in the past five months to date.
