Pak rupees hit new low vs USD, slides to Rs 227.88 a dollar

KARACHI: Amid the faltering economy and depreciating currency, the Pakistani rupee continued to lose its value against USD, falling to Rs 227.88 against the dollar in the interbank market, reported The Express Tribune.

The fresh drop came after the government failed to make any headway in its talks with the International Monetary Fund (IMF) for the revival of its stalled USD 6.5 billion loan programme.

The domestic currency has cumulatively lost 4.42 per cent (Rs10.09) of its value in the last three months, compared to Rs 217.79 in early October.

With the IMF programme still halted, the country's foreign exchange reserves have depleted to USD 6.5 billion - hardly enough to provide a 25-day import cover to the country, reported The Express Tribune.

Financial experts said that the interbank exchange rate of Rs 227.88 was not the real value of the rupee. Instead, the US dollar was available in the black market for as high as Rs 270.

Finance Minister Ishaq Dar has tried to artificially control the rupee value in the interbank market, which was also one of the leading reasons behind the delay in the resumption of the IMF programme. The lending institution has asked the government to let market forces (commercial banks) determine the rupee-dollar parity, reported The Express Tribune.

The dwindling foreign exchange reserves have forced the government to curb imports, badly impacting economic activities in the country.

A number of industrial units have either closed partially or completely amid the non-availability of imported raw materials.

Moreover, the country's foreign debt obligations for the next six months stand at USD 13 billion, sparking concerns about Pakistan defaulting on them.

Therefore, the resumption of the IMF programme is the only lifeline for the nation to avert default, reported The Express Tribune.

On the other hand, the local gold prices dropped by Rs 3300 to Rs 181,800 per tola, according to the All-Pakistan Sarafa Gems and Jewellers Association (APSFJA).

This was despite the fact that international gold prices had seen an increase of USD 5 per ounce to touch USD 1,876 on the same day, reported The Express Tribune.

The drop in the local market, against an increase in the international market, suggests that the demand for the commodity had dropped in the domestic market, added the experts.