Daily Times

The rupee slumped to a record low of 298.93 amid political tumult in the wake of clashes that broke out in the country following the arrests of senior leaders of the Pakistan Tehreek-e-Insaf (PTI) The local unit fell Rs8.71, or 3%, against the dollar on Thursday closing at 298.93 in the interbank market, data released by the State Bank of Pakistan (SBP) showed. The dollar bonds due 2031 fell to the lowest since November on Thursday and were indicated at 33.10 cents on the dollar. The new rate is just Re1 away from the much-anticipated rate of Rs300 per dollar. The rupee depreciation has piled up foreign debt without taking new external loans, making imports further expensive for Pakistan, which faced a six-decade high inflation reading at 36.4% in April 2023. Moreover, the dollar demand supply gap has also widened as the exporters have stopped selling US currency on speculations that rupee would depreciated further versus the greenback. On the other hand, importers are seen rushing to buy dollars. This gap in the demand and supply of the foreign currency in the interbank market have contributed to the rupee’s devaluation.