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Pakistan's currency plunged to the lowest ever level on Wednesday, as the US dollar for the first time in Islamabad's history went beyond PKR200 benchmark in open market.
In the open market, the US currency was being traded at PKR200.50. Meanwhile, dollar value reached PKR198.39 in interbank yesterday as against PKR195.74 on Tuesday. In the wake of the dwindling foreign reserves and the inflows taking more than expected time to support the exchange rate, Pakistan's Prime Minister Shehbaz Sharif chaired a meeting with the Exchange Companies Association of Pakistan (ECAP) on Monday to halt the rupee's free fall. A Dawn report said on Monday that when the PML-N-led coalition government took over on April 11, the dollar was valued at Rs182.3, and since then, the rupee had lost Rs11.4 or 6.2 per cent of its value. "It is the open market or exchange companies that increase the dollar rates. In fact, the commercial banks have been increasing the rate," ECAP Chairman, Malik Bostan told the prime minister in the meeting. The importers are opening more LCs due to the uncertain exchange rate while the exporters are surrendering fewer export proceeds, causing a shortage of dollars, he further said. Pakistan expects to get a loan from the International Monetary Fund, a rollover of $2.3bn from China and help from Saudi Arabia. However, the hope to raise dollars from the international market through the launching of Sukuk bonds is not getting support due to the weak external accounts of the country. The rising oil prices have already doubled the oil import bills, but the overall imports are also at a record high. In April, imports increased by 72 per cent, leaving no room for the government to improve its external balances while the foreign exchange reserves of the central bank have touched $10.3 billion, the lowest since June 2020. According to a Dawn report, the PM would hold another meeting with Bostan and the SBP governor on the exchange rate today. This will be the third meeting held by the government on the issue in four days and reflect the growing frustration in the power corridors of Islamabad, the report said. The fast depletion of the foreign exchange reserves was the result of Pakistan's inflation of twin deficits, a lack of foreign currency inflows, and a sharp increase in the foreign debt servicing obligations Inflation in Pakistan entered the double-digit mark in July, the biggest surge in nearly six years. (ANI)
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