Pak rupee plunged 8.29% to a new all-time low of Rs290.18 against the US dollar in interbank market
KARACHI, March 02 (SABAH): Pakistani rupee plunged 8.29% (or Rs24.07) to a new all-time low of Rs290.18 against the US dollar in the interbank market on Thursday.
The rupee continued its significant loss of value on the second consecutive day since the government reinstated the market-based exchange rate on the directive of the International Monetary Fund (IMF).
The currency hit a record low Thursday morning as importers were found to be panic buying dollars while exporters have reportedly withheld selling the greenback, waiting for a higher exchange rate.
Reports in the market suggest that the IMF wants the value of the rupee in the interbank market to match its value in the black currency market.
Traders, who failed to purchase dollars from the interbank market due to limited availability, reverted to the black market to meet their requirements. Accordingly, the local currency took a quick plunge in the illegal market compared to the appreciation it had witnessed in the interbank market over the past few days and weeks.
Exchange Companies Association of Pakistan (ECAP) Secretary General Zafar Paracha said that the domestic currency is available at Rs286 per dollar in the black market while it is trading at Rs295 per dollar in Afghanistan.
The IMF’s condition to truly allow market forces to determine the rupee-dollar exchange rate resulted in the Pakistani currency nosediving.
The rupee had lost 1.73% (or Rs4.61) to a two-week low of Rs266.11 per dollar in the interbank market on Wednesday last. Cumulatively in the past two days, the domestic currency has fallen by Rs28.68. The currency had previously hit its previous record low of Rs276.58 about a month ago on February 3, 2023, after the government had ended its control over the rupee-dollar exchange rate on January 25.
The currency has received a massive jolt ahead of the State Bank of Pakistan (SBP) meeting today to jack up its key policy rate by an estimated 200 basis points to fulfill another IMF condition.