Alam Zeb Khan
ISLAMABAD: Pakistani rupee plunged again on Friday as the local currency closed at a record low of Rs276.58 against one US dollar in the interbank market against its closing of Rs271.36 on Thursday, as reported by the State Bank of Pakistan.
On Friday, at the end of the business, a depreciation of Rs5.22 was experienced in the local currency taking the dollar to a historic high in the country.
The last-day slide suffered by the local currency comes, amid the government continuing talks with the delegation of the International Monetary Fund (IMF) in Islamabad to finalize the ninth review of the $7 billion loan program to Pakistan. If the review is successful, it will pave the way for a $1.2 billion tranche for Pakistan as part of the $7 billion loan.
Meanwhile, a statement by Prime Minister Shehbaz Sharif saying that the IMF delegation was giving a tough time to Finance Minister Ishaq Dar and his team during talks might be proved as psychological pressure for the market to go down.
Pak Rupee depreciation against the US dollar
The Pakistani rupee began its downslide on January 26 with a major blow of a loss of Rs24.54, in the interbank and open market after the government and the exchange companies removed an unofficial cap on the exchange rate of USD to PKR. It was the highest depreciation on a single day after 1999. As a result, the rupee lost its value against the dollar by about 20 percent in just 10 days.
Economy experts are of the view that the removal of the cap was mandatory to have a much-needed adjustment and also to fulfill one of the conditions being tabled by IMF to keep the exchange rate as free float. However, removing the cap would possibly lead the country to a worsening economic situation and rising inflation for the days to come.
Meanwhile, after approval of the ninth review from the IMF, Pakistan will be in a better position to tackle the challenging economic situation.
