Pakistani rupee tumbles to all-time low against US dollar amid economic woes

Pakistani rupee sank to Rs 287.29 against US dollar, a record low on Tuesday as cash-starved country struggles to unlock critical International Monetary Fund (IMF) funding while dwindling foreign exchange reserves become ar source of concern for investors, a media report said.

local unit, in interbank market, closed at 287.29 against US dollar, 0.78 per cent or Rs 2.25, down from Monday’s close of 285.04, Geo News reported.

Last month, rupee hit a record low, closing at Rs 285.09 per US dollar on March 2, data released by State Bank of Pakistan (SBP) showed.

According to financial experts, Financial importers have resumed panic buying of US dollars, while supply of foreign currency remained low in interbank market.

Pakistan’s loan programme is yet to materialise months after it raised taxes and energy prices and allowed currency to depreciate to meet IMF’s conditions. nation has missed multiple deadlines to resume its bailout.

cash-strapped nation secured a USD 6 billion IMF bailout in 2019. It was topped up with ar USD 1 billion last year to help country following devastating floods, but IMF n suspended disbursements in vember due to Pakistan's failure to make more progress on fiscal consolidation.

After months-long unfruitful talks, Washington-based lender has asked Pakistan to seek commitments for new loans from Saudi Arabia and United Arab Emirates before it revives bailout.

IMF’s resident representative for Pakistan said country has a few more tasks to complete to meet requirements for a USD 6.5 billion bailout.

lender approved a USD 3 billion loan programme for Sri Lanka last month to ease its ecomic crisis.

“Uncertainty on IMF and friendly countries' inflow affecting rupee,” said Mohammad Sohail, CEO of Topline Securities.

“Some of ruling coalition partners are due to visit Saudi Arabia next week and it is a key event to watch,” Sohail added.

Finance Minister Ishaq Dar will be leading a high-powered delegation to US which will attend upcoming annual spring meeting of Bretton Woods Institutions, kwn as IMF and World Bank, from April 10 to 16.

Moreover, country’s foreign exchange reserves have also declined in recent weeks, which is ar source of concern for investors.

forex reserves held by central bank stand at a critical level of only USD 4.24 billion (as of March 24, 2023).