Rupee tumbles to historic low of Rs190.02

KARACHI: The rupee tumbled 1.37 to touch a record low of Rs190.02 against the dollar on Wednesday, amid worsening economic and political situation in the country.

The local unit fell Rs1.37 to close at Rs190.02 to the dollar from Tuesday’s closing of Rs188.65 in the interbank foreign exchange market.

The local currency recorded the previous historic low of Rs188.65 on May 10, 2022.

The latest decline in the value of the rupee comes as it fell for the fifth consecutive session due to the uncertainty on the economic and political front where the government has so far failed to take any measures to provide stability to the rupee and the forex reserves of the country, dealers said.

They said that the stalled talks with the International Monetary Fund (IMF) for the revival of the Extended Fund Facility (EFF), depleting forex reserves and widening current account and trade deficit have kept the local currency under pressure.

The State Bank of Pakistan’s (SBP) reserves recorded a decline of $59 million to $10.5 billion during the week ending April 30. The reserves held by commercial banks fell to $6.0 billion.

Pakistan’s foreign exchange reserves fell by $115 million during the week ending April 30, on the back of increasing external debt payments and higher current account deficit.

The total liquid foreign reserves held by the country stood at $16.5 billion, compared with $16.6 billion in the previous week.

The rupee tumbled against the greenback amid higher demand for the dollar from the importers coupled with trade and current account deficit witnessing a surge and reduced inflows which has dented the traders’ confidence.

The ballooning current account deficit is another reason for escalation in the dollar value. Pakistan’s current account deficit ballooned to $12 billion during the first eight months (July – February) 2021/22 against a surplus of $994 million in the corresponding months of the last fiscal year.

The local currency remained under pressure since the start of the current fiscal year. The rupee lost Rs32.48 or 20.61 per cent from Rs157.54 to dollar on June 30, 2021 to the current level of Rs190.02.

At the open market, the buying and selling of the dollar was recorded at Rs189 and Rs191.5 at 5:00pm PST.