ISLAMABAD: The Pakistani rupee hit a record low against the US dollar on Tuesday, falling to PKR 231 in the interbank market, according to local media. According to the Foreign Exchange Association of Pakistan, the local currency decreased to PKR 231 with PKR 1.12 at 10:40 am. today, from PKR 229.88 yesterday.
With the currency lately hitting a record low, losses at the Pakistan Stock Exchange (PSX), rising inflation, and low forex reserves, experts in Pakistan believe that the delay in the IMF lending facility and domestic political turbulence generated a brief economic crisis in the country. Since the first week of July, the rupee has been losing value against the dollar.
"Markets are responding to these shocks in an unduly broad-brush manner, without paying enough regard to Pakistan's relative strengths," said Murtaza Syed, acting governor of Pakistan's central bank. According to capital market expert Muhammad Saad Ali, the rupee has fallen due to increased political uncertainty in the Punjab region, as reported by local media.
"Note that BoP (balance of payments) pressures on the currency have reduced, according to the SBP, which says that Pakistan has enough capital commitments to cover its dollar outflows for the next 12 months," he said. The Pakistani rupee smashed all previous records against the US dollar on Friday, hitting a new interbank low of PKR 228 versus the dollar.
According to data supplied by the State Bank of Pakistan (SBP), the rupee plummeted as low as 229 during intraday trade before closing at PKR 228.27.
Pound hovers around USD 1.20 on economy worries
South Korea to cut corporate, income taxes next year
UK inflation surges, Sterling stabilises against dollar, euro