KARACHI: According to data from the Forex Association of Pakistan, the Pakistani rupee smashed all records against the US dollar on Tuesday, losing 4 PKR in the open market and crossing the 205 thresholds for the first time in history. The Pakistan currency reportedly continued to fall against the US dollar, hitting an all-time low of 202.75 PKR in the interbank market during intraday trade, owing to increased demand for the greenback due to import payments.
The local currency continued to fall as demand for the rupee outstripped supply, owing to rising import demand as a result of oil payments. According to reports, Tahir Abbas, an analyst at Arif Habib Limited, the Pakistani currency is under pressure due to outstanding oil payments and rising oil prices in the international market. "The drop was caused by a massive import bill, which worsened the current account deficit," he stated.
The market is keeping a careful eye on developments regarding the International Monetary Fund (IMF) programme, which is expected to be resurrected following the budget announcement because the government is taking all feasible steps to meet the Fund's terms.
The last time the PKR broke through the 202 barrier was on May 26, when there was more uncertainty about the IMF lending program's resuscitation than there is now.
The recent negative trend began when the government increased the price of petroleum products by 60 PKR per litre as a result of the removal of subsidies, which was one of the money lender's main demands.
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