The Pakistani rupee lost Rs18.74 versus the dollar during intraday trade on Thursday due to political and economic instability, sending the US dollar spiralling out of control.
As of the current trading session, the dollar was being traded for Rs284 in the interbank market. The international monetary fund (IMF) arrangement was delayed, which led to a record decline in the value of the local currency.
Experts blamed the government’s standoff with the International Monetary Fund for the record loss, which is 7.04 % (IMF). According to SBP data, the PKR completed the day on Wednesday at Rs266.11.
Chief Executive Officer of Topline Securities Mohammed Sohail told that the recent decline was mostly brought on by a lack of confidence in the currency market due to the IMF’s delayed funding.
After the government restored the market-based currency rate by the International Monetary Fund’s recommendation, the rupee has continued to lose a considerable amount of value every day for the past two (IMF).
This morning, as importers scramble to buy dollars, exporters resisted selling the dollar in anticipation of a better exchange rate, and the currency reached an all-time low.
The government’s decision to limit imports to manage the decreasing foreign exchange reserves amid a high default risk has not stopped the interbank market from appreciating, claims Arif Habib Limited.
The change occurs as the market prepares for the State Bank of Pakistan’s (SBP) emergency Monetary Policy Committee (MPC) meeting, which is planned for later in the day. The MPC will discuss further monetary tightening to manage inflation. On Wednesday, the local currency declined against the US dollar and ended the day at 266.11 after losing 1.73%, or Rs4.61, in the inter-bank market.
Due to a dearth of supply, traders who were unable to buy dollars on the interbank market turned to the black market to fill their needs. In contrast to the increase it had seen in the interbank market during the previous few days and weeks, the local currency as a result quickly fell in the underground market.
According to Zafar Paracha, Secretary General of the Exchange Companies Association of Pakistan (ECAP), the local currency is accessible on the underground market for Rs286 per dollar whereas it is valued at Rs295 in Afghanistan.
The Pakistani rupee has fallen precipitously as a result of the IMF’s demand that market forces actually determine the rupee-dollar exchange rate.