Despite the International Monetary Fund’s (IMF) statement that the multibillion-dollar loan program would resume, the Pakistani rupee plunged to an all-time low against the US dollar on Tuesday, reaching Rs. 222 in the interbank market.
Today, the local currency continued to fall against the US dollar and lost another 6.90 rupees.
In the interbank market on Monday, the rupee plummeted by Rs. 4.25, or 1.97 percent, versus the US dollar.
With ongoing political unrest and a bad macroeconomic environment, the currency lost a lot of weight.
The State Bank of Pakistan (SBP) has begun to stifle the outflow of small-dollar sums of less than $100,000 in order to prevent a further decline in the reserves, putting numerous factories at risk of closure and financial fines.
One of the main reason behind the depreciation of Rupee value and stock market today are Fitch Ratings. On Monday, Fitch Ratings revised Pakistan’s outlook from stable to negative despite maintaining the country’s “B-” long-term foreign currency issuer default rating (IDR). The Pakistan Stock Exchange (PSX) market also affected from that news and depreciated of about 978 points on KSE-100 index and closed at 40,389.
According to a statement from Fitch Ratings, Pakistan’s external cash situation and financing conditions have significantly worsened since early 2022, which is why the outlook has been revised to negative.
According to the sources, Pakistan is using a variety of capital restrictions, including restrictive measures, to prevent a situation like default while the IMF takes its time approving and disbursing a $1.12 billion loan tranche.
Resuming the loan program will increase the nation’s ability to make international payments and release foreign currency inflows from other bilateral and multilateral sources.
Additionally, China recently deposited a $2.3 billion loan for Pakistan with the State Bank after rolling it over.
The Pakistan Stock Exchange (PSX) fell 770 points during intraday trade on Monday, mirroring the decline in the currency.
In the midst of “political and economic uncertainties in Pakistan,” an expert stated, the capital market came under fresh pressure.
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