The rupee plunged against the dollar in interbank trading on Tuesday morning, hitting an all-time low of Rs. 203, with analysts blaming oil-related payments and uncertainty over the reinstatement of the International Monetary Fund‘s loan facility for the drop.
The dollar gained Rs. 2.85 against the previous day’s close of Rs. 200.40, rising to Rs. 203.45 at 12:30 a.m., according to the Forex Association of Pakistan. (The FAP’s previous session’s closing rate is slightly higher than the State Bank of Pakistan’s official rate of Rs. 200.06).
Around 12:15 p.m., the dollar was trading at Rs. 204 in the open market.
The rupee’s value has taken yet “another dip,” according to Saad Bin Naseer, director of Mettis Global, a web-based financial data and analytics portal, as a result of the currency market being roiled by “decline in [foreign exchange] reserves and oil-related payments,” after it fell by more than Rs. 2 against the dollar on Monday.
He also stated that the rupee was under pressure due to the scheduled Financial Action Task Force meeting next week.
“All of these factors combined with the uncertainty surrounding the resumption of the International Monetary Fund program and China’s refinancing of $2.3bn have pushed the rupee to a new low,” Naseer told news agency.
The FAP’s Malik Bostan predicted that the rupee will stay under pressure until June 30, citing rising inflation as a result of the IMF’s $6 billion program with Pakistan being delayed, as well as price spikes in fuel, gas, and electricity.
He went on to say that this would result in an increase in interest rates, which would weaken the rupee.
The rupee’s depreciation was also tied to the dollar’s rising in the international market, according to Boston.
He predicted that the dollar’s rising trend will continue in the following days.
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