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Tuesday, September 19, 2023

Pakistani rupee slumps to 190 against USD

The local currency is trading at 190.10 against the US dollar in the interbank market today.

The Pakistani rupee declined to an all-time low against the US dollar today, breaching the critical threshold of 190 against the greenback in the interbank market.

The local currency was trading at 190.10 against the greenback in the interbank market during the intraday trade. The greenback appreciated by Rs1.44, surpassing Tuesday’s close of Rs188.66.

The uncertainty concerning the International Monetary Fund (IMF) programme and an absence of direction from the government on major economic policies have led to the rupee’s devaluation.

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

The dollar has appreciated by Rs3.48 in the interbank market. It closed at Rs188.66 in the interbank market on Tuesday.

In a Tweet, journalist Syed Talat Hussain said, “Prime Minister Shahbaz Sharif needs to wake up. Dollar at interbank at historic high of rs 190; interbank up by ra 1.34. During this fiscal year, the rupee has fallen by 32.46 against the dollar increasing the debt by rs 4000. Dollar in the open market is selling around Rs191.50.”

Meanwhile, the Pakistan Stock Exchange (PSX) has witnessed intense selling pressure. The benchmark KSE-100 index shed nearly 1,000 points during the intraday trading on Wednesday, two days after losing almost 1,500 points.

According to the PSX website, the KSE-100 Index opened at 43,504.36 points. By 1 pm, it had slid nearly 1,000 points, or around 2.28 per cent, to 42,513.78 points.

Tahir Abbas, Head of Research at Arif Habib Limited, told Geo News that the rupee was down for two major reasons, “First, due to uncertainty regarding the revival of the IMF loan programme. Second, depleting foreign exchange reserves,” he said.

The analyst added that lack of direction and clarity regarding the government’s economic strategy, delay in decision making on IMF’s pre-requisites, including removal of subsidies and increase in petrol and electricity prices, and rising commodity prices in the international market dampened the sentiment of the market.

Abbas said: “Because of the uncertainty regarding the IMF programme, other friendly countries have also said loans are contingent on fulfillment of IMF conditions which is also taking a toll on the already depreciating currency.”

Read more: Pakistani rupee plunges to all-time low

“The government needs to lay out a clear economic roadmap,” he asserted.

During Prime Minister Shehbaz Sharif’s visit to Saudi Arabia earlier this month, Saudi Crown Prince Mohammed bin Salman had agreed to discuss extending the term of a $3 billion loan to help Pakistan’s new government tide over the prevailing economic crisis.

But so far, no concrete details have come out from these talks.