The value of the rupee against the US dollar reaches a record low of 288.
Importers are acting in a panic and buying dollars while there is a low supply of other currencies on the interbank market.
In the interbank market in Karachi on Tuesday, the Pakistani rupee fell to a new all-time low of Rs288 against the US dollar. This came as a result of delays in the revival of a loan program with the International Monetary Fund (IMF), as well as the looming high risk of defaulting on the repayment of foreign debt.
At approximately 10:23 this morning, the value of the currency decreased against the US dollar by 1%, which is equivalent to Rs2.86. The previous day, the rupee had finished trading at Rs285.04 to the US dollar.
The Indian currency, the rupee, fell to a new all-time low last month, ending at Rs285.09 to the United States dollar on February 3, 2023.
The availability of foreign currency on the interbank market has remained low despite widespread speculation in the market that importers have restarted their frantic buying of United States dollars.
The government announced that Finance Minister Ishaq Dar would visit the United States from April 10-16 in order to make attempts to resume the IMF loan program worth $6.5 billion. As a result of this announcement, the current situation has arisen.
The administration has stated that while he is in the country, Dar will be attending the annual meetings of the International Monetary Fund and the World Bank in Washington, DC, along with other high-ranking officials.
By the end of January, Pakistan has continued to engage the Fund in discussions over the restarting of the program that was suspended in November of 2022.
The delay has created a halt in the flow of finance from other countries. As a direct result of this, the nation’s foreign exchange reserves have dwindled to an alarmingly low level, which stands at $4.2 billion at the moment.
Due to the lack of foreign exchange reserves, there is a significant risk that a default on the repayment of foreign debt will occur in the not too distant future.
The government also stated that Saudi Arabia has indicated that it will provide a new bailout package for Pakistan; however, it is unknown how much money will be provided or when it will be distributed.
As a result of the increased political and economic instability in Pakistan, the International Monetary Fund (IMF) and other nations that have positive relations with Pakistan have ceased their financial assistance to Pakistan.
According to a prominent analyst, the market is witnessing higher demand for the dollar as a result of increased pressure to make import payments. He brought up the fact that the International Monetary Fund had recommended that the government completely resume imports.
