Rupee Crashes to Record Low, Dropping Rs. 8.84 Against US Dollar Under New Govt

The Pakistani Rupee (PKR) fell further against the US dollar, reaching an all-time low of Rs. 191.77. In the interbank market today, the rupee fell by Rs. 1.75 against the US dollar.

The PKR fell 0.91 percent against the USD today, closing at Rs. 190.02. The PKR lost Rs. 1.36 against the USD at the close of yesterday’s session, closing at Rs. 190.02. Since the newly formed coalition government took office, the US dollar has gained Rs. 8.84 against the rupee.

The rupee’s decline has been attributed to some factors. The most important of which is the high import bill and the delay in the revival of the International Monetary Fund (IMF) bailout.

The coalition government’s hasty trip to Saudi Arabia for financial aid also failed to produce positive results. The newly formed government hoped that the UAE and China would also offer financial assistance, but without the IMF, any service appears unlikely.

On May 18, discussions with the IMF about policies for completing the seventh review of the country’s Extended Fund Facility (EFF) are expected to resume. However, before the talks can begin, the government must decide on fuel and electricity subsidies.

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Trustmark’s Head of Research, Komal Mansoor, told ProPakistani,

Right now, the rupee has very little support. We could also see a surprise interest rate hike soon. The reasons for the rupee’s weakness are dwindling reserves and the low likelihood of new inflows. However, global and regional currencies are all weakening; the Indian rupee hit an all-time low against the US dollar today, and the Yuan, Euro, and Pound Sterling have all hit multi-year lows. Global equity weakness, surging commodity prices, a hike in US interest rates, and Russia’s invasion of Ukraine are all contributing factors to the crisis.

Asad Rizvi, former Treasury Head of Chase Manhattan Bank, said in a tweet about the local currency’s performance during the day that it has lost 9 percent of its value against the USD since the start of Russia’s invasion of Ukraine.

He claimed that the region’s currencies have suffered due to the economic slowdown and high oil prices. Rizvi went on to say that there is no relief in sight.

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In the interbank currency market today, the PKR reversed losses against the other major currencies and reported gains. It rose 38 paisas against the Euro (EUR), 1.01 rupees against the Pound Sterling (GBP), and 1.01 rupees against the Australian Dollar (AUD) (AUD).

PKR, on the other hand, reported a loss of 83 paisas against the Canadian Dollar (CAD) and 47 paisas against the UAE Dirham (AED).

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