Rupee hits all-time low of Rs222 against US dollar

The Pakistani rupee hit an all-time low on Tuesday against the US dollar, reaching Rs222 in the interbank market despite an announcement by the International Monetary Fund (IMF) regarding the resumption of the multi-billion-dollar loan programme.

The local currency continued its downward trend today and depreciated further by Rs6.90 against the greenback.

The rupee had nosedived Rs4.25, or 1.97%, against the US dollar in the interbank market on Monday.

The currency lost significant ground in the backdrop of continuing political uncertainty and poor macroeconomic situation.

Amid declining foreign exchange reserves, the State Bank of Pakistan (SBP) has started choking the outflow of dollars of small amounts of less than $100,000 to avoid a further dip in the reserves, exposing many factories to the risk of closure and monetary penalties.

The restrictive measures by the central bank are part of various capital controls that Pakistan is applying to avert a default-like situation amid a delay in approval and disbursement of a $1.12 billion loan tranche by the IMF, according to the sources.

Resumption of the loan programme will unlock inflows of foreign currencies from other multilateral and bilateral sources as well and improve the country’s capacity to make international payments.

China has also rolled over its loan of $2.3 billion for Pakistan and deposited it in the State Bank a few weeks ago. In line with the rupee fall, the Pakistan Stock Exchange (PSX) slumped 770 points in intra-day trading on Monday. The capital market came under renewed pressure in the wake of “political and economic uncertainties in Pakistan,” an expert said.