Daily Times

The Pakistani rupee continued its month-long run of depreciation, with the currency reaching its all-time low of 200 against the US dollar on Thursday.

The local currency has been setting all-time new lows for the last eight sessions. The State Bank of Pakistan said in a statement that the rupee opened at 198.39 against the US dollar in the interbank market and closed at 200 after shedding Rs1.61 (-0.81 percent). Within the open market, the rupee was traded at 202/203 per dollar against 200/201 a dollar earlier.

The local unit has shed Rs7.47 during the last four days against the US dollar after losing Rs5.90 during the last week. Overall, the rupee has depreciated by Rs42.51 against the US dollar during the ongoing fiscal year 2021-22 and Rs23.69 during the current year 2022.

The rupee continues to slide in line with the predictions of analysts who fear more losses ahead as the country remains mired in political and economic instability. A business analyst said the dollar was already selling for Rs200 on Wednesday in the open market but on Thursday it breached the Rs200 mark in interbank trading as well. “Until the government gives more clarity on how it intends to halt the economic slide and put us on the path to revival the market will continue to function like this and the dollar will gain by the day,” said Saeed Nazam, an analyst at Topline Securities.

The Forex Association of Pakistan reacted with deep concern. “It is a black day in the history of Pakistan. I never imagined I would see this day all because of poor economic management,” said Secretary General Zafar Paracha.

Forex Chairperson Malik Bostan urged the Federal Board of Revenue (FBR) to issue statutory orders to restrict imports. “Our importers are facing the biggest losses due to this surge in the dollar rate,” said Abdullah Zaki, a former member of the Karachi Chamber of Commerce and Industry.

The currency experts said that until the government secures funding from friendly countries and the International Monetary Fund (IMF) resumes its programme, the economic situation will not improve. They said that importers have been engaged in panic buying as they are uncertain about whether the government will be able to secure funding from foreign institutions, while exporters have held their earnings outside the country amid a consistent fall in the rupee’s value.

The government began talks with the IMF on Wednesday last over the release of crucial funds. Pakistan has repeatedly sought international support for its economy, which has been hit by crippling national debt, galloping inflation and a plummeting rupee. The talks are being held in the Qatari capital Doha, the Ministry of Finance said, and are expected to continue into next week.

The industry experts believe the country is desperately in need for the revival of the programme to avoid increasing the risk of defaulting on international payments, specifically on imports and foreign debt repayments. The country’s foreign exchange reserves have depleted to critically low levels, indicating only six weeks of import cover as compared to the usual three-month import cover.