The Pakistani rupee continued its free-fall and crossed the 210 threshold against the US dollar for the first time in the interbank market on Tuesday.
According to the central bank data, the local currency plunged Rs 1.52 to a record low of Rs 211.48 against the greenback.
The latest deflation is observed amid the conflicting reports that commercial banks were running short of foreign currency to pay for imports.
Furthermore, there are some rumours in the market that Pakistani exporters had cancelled some of their export orders, which will further restrict the supply of US dollar in the domestic market depreciating rupee further.
The head of assets at Arif Habib Limited stated that the uncertainty of the restoration of the IMF loan programme for Pakistan has continued to increase pressure on the rupee.
The revival of the IMF programme, however, is required to manage the balance of payments crisis.
The foreign exchange reserves of Pakistan have depleted to a critical level of six-week import cover at $9.2 billion as of last Thursday. The reserves may drop further when the central bank issues its weekly update on reserves on Thursday (today) evening.
Moreover, the national currency’s free-fall continues as the rupee crashed and crossed Rs 210 compared to the US dollar for the first time in the inter-bank market on Tuesday, as contradictory reports regarding the revival of the IMF loan programme played on dealers’ minds and made the foreign exchange market jittery.
“The rupee has nosedived on panic buying of dollars by importers … amid prolonged delay in the resumption of IMF loan programme and continuous depletion in foreign exchange reserves,” Alpha Beta Core (ABC) CEO Khurram Schehzad said.