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Thursday, February 15, 2024

Dollar soars to Rs192.20 in an all-time high

The rupee drops to Rs192.20 in the interbank market on Thursday as the country remains mired in political and economic instability.

The Pakistani rupee has dropped to an all-time low of Rs192 in the interbank market on Thursday as it continues to lose ground against the US dollar.

According to the Forex Association of Pakistan, the dollar breached the 191-mark at the day’s start and soared to Rs192.20 around 11:45 am.

It comes a day after the dollar appreciated by Rs2 from the previous day’s close of 190.20, which was the record high value for the dollar before today’s session.

Read more: Pakistani rupee slumps to 190 against USD

The dried-up foreign currency inflows coupled with a delay in the revival of the International Monetary Fund (IMF) programme and a lack of financial support from friendly countries add to the local unit’s pressure. Meanwhile, the country remains mired in political and economic instability.

The investors are eyeing whether the new government will withdraw energy subsidies to restart IMF loan negotiations on May 18 and whether it will agree to announce fresh elections or not.

On the other hand, the Pakistan Stock Exchange (PSX) has lost over 500 points.
Dawn said the rising exchange rate had rattled the economy in a report on Wednesday.
Due to an uncontrolled rise in imports and a relatively slower pace of growth in exports, the rupee has devalued. This trade deficit reached $39 billion in July-April.

Currency dealers said higher demand for the dollar was the key reason for the bullish trend in the currency market. Whereas, political foot-dragging by the incumbent government on the reversal of fuel and electricity subsidies had further eroded the confidence of stakeholders. But, it is a prerequisite for the resumption of the loan programme by the IMF.

Read more: Rupee plunges after reports by World Bank, IMF

The day-to-day devaluation of the local currency could cause a severe panic-like situation as investors are found clueless. The rising inflation and the depreciation of the local currency mean declining purchasing power of consumers as traders ask for higher profits to save their investments.

Currency experts and dealers fear that the rupee will fall more rapidly in the coming days unless and until inflows from anywhere appear on the horizon.