Pakistani rupee slumps further to PKR 231 against dollar

According to the Foreign Exchange Association of Pakistan, the local currency, which had closed at PKR 229.88 yesterday, fell to PKR 231 with PKR 1.12 by 10:36 am today.

With the rupee hitting a record low level, losses at the Pakistan Stock Exchange (PSX), high inflation and low forex reserves of the country recently, experts in Pakistan believe that the delay in the loan facility from IMF and domestic political upheaval created a temporary economic crisis in the country.

The rupee has kept losing its value against the dollar since the first week of July.

"Markets are responding to these shocks in an unfairly broad-brush way, without paying enough attention to Pakistan's relative strengths," Acting governor of Pakistan's central bank Murtaza Syed said.

Capital marker expert Muhammad Saad Ali said there has been a slump in the rupee due to the rise in the political uncertainty in the Punjab province, local media reported.

"Note that BoP (balance of payments) pressures on the currency have eased, as per the SBP, which asserts that Pakistan has enough capital commitments for the next 12 mths to take care of its dollar outflows," he said.

On Friday, the Pakistani rupee surpassed all prior records against the US dollar after hitting a fresh record low of PKR 228 against the dollar in the interbank market.

The data released by the State Bank of Pakistan (SBP) showed that the rupee fell to as low as 229 during the intraday trade, but it closed at PKR 228.27.

Analysts have said that the political uncertainty in the country due to the by-elections in Punjab and the delay in the International Monetary Fund's (IMF) programme has contributed to the slump of the Pakistani rupee.

The former adviser to the finance ministry Dr Khaqan Hassan Najeeb said that the political uncertainty and a Fitch ratings downgrade has influenced the free fall of the rupee, local media reported.

"With the pronounced rupee slide, financial institutions tried to cover import payments. It created a higher demand in the interbank," the former adviser said adding that exporters hold their proceeds during depreciation to yield a better rate in the future. (ANI)