- Currency records a loss of 0.17% due to mounting import payment pressure and uncertainty regarding IMF talks.
- With a fresh drop of 30 paisas, the rupee has depreciated Rs13.5 since the start of the current fiscal year on July 1, 2021.
- Traders believe that successful resumption of the IMF loan programme would stabilise the rupee value at around current levels.
KARACHI: The rupee touched a new all-time low of Rs171.04 against the US dollar in the inter-bank market on Tuesday in the wake of mounting pressure of import payments on the back of a surge in commodity prices in global markets as well as looming uncertainty regarding scheduled talks between the International Monetary Fund (IMF) and Pakistan.
While some analysts suggest that the talks between the IMF and Pakistan to resume a $6 billion loan programme are not a strong reason behind the downward trend in the rupee, almost all agree that the successful conclusion of the discussion is projected to end volatility in the currency.
With a fresh drop of 30 paisas (or 0.17%) on Tuesday, the rupee has depreciated 8.56% (or Rs13.5) since the start of the current fiscal year on July 1, 2021, revealed data released by the State Bank of Pakistan (SBP).
The rupee has maintained its downward trend since its recent high of Rs152.27 against the greenback recorded on May 14, 2021. Since then, the currency has lost 12.32% (or Rs18.77).
Market speculation suggests that exporters have stopped selling dollars in the inter-bank market based on rumours that the rupee will fall further to around Rs175.
Earlier, analysts predicted that the local currency will trade in a range of Rs170-171 during the week.
However, they had mentioned that the central bank will be concerned if the rupee breaches the 171 barrier, adding that it will result in higher prices of food products, general inflation and people paying more for imports.
It is pertinent to mention here that the central bank has opted for a flexible exchange rate to let market forces decide the per dollar value of the rupee keeping in view the demand and supply of the foreign currency.
Traders believe that successful resumption of the IMF loan programme would stabilise the rupee value at around the current levels.
However, they predict that in case the two sides fail to find middle ground and talks end on an unsuccessful note, the rupee may cross several limits on the downside.