Pak Rupee continues to decline, closing at Rs276.58 against US dollar in interbank
According to the State Bank of Pakistan, the Pakistani rupee lost value once further on Friday, reaching a record low of Rs276.58 per dollar in the interbank market, DAWN has reported.
As compared to Thursday's close of Rs271.36, this is a depreciation of Rs5.22, or 1.89%.
The government is still in negotiations with an IMF delegation, which is in Islamabad to complete the ninth review of its $7 billion loan package to Pakistan, while the slide for today occurs. Pakistan would be eligible for a $1.2 billion tranche if the review is successful.
Alpha Beta Core CEO Khurram Schehzad said Pakistan Prime Minister Shehbaz Sharif's statement that the Fund delegation was giving a tough time to Finance Minister Ishaq Dar and his team during talks had lowered confidence once again and the rupee's value declined as a result.
The rupee began its downslide on 26 January when it lost Rs24.54, or 10.6%, in the interbank market after the government removed an unofficial cap on the USD-PKR exchange rate, reports DAWN.
It was the largest single-day depreciation in both absolute and percentage terms since the new exchange rate system was introduced in 1999, according to Ismail Iqbal Securities.
Since 26 January, the rupee has lost 19.8% of its value.
One of the requirements imposed by the international lender for the restart of discussions on the ninth review was the lifting of the exchange rate price cap.
Analysts termed the rupee's depreciation a "much-needed adjustment". The removal of the cap resulted in the interbank and open markets aligning more closely, with currency dealers now expecting a black market in dollars to eventually dry up.
The government's decision to remove the price cap came as the country's economic situation worsened due to servicing endless external debts and battling rising inflation.
Besides, left with only $3.09 billion in foreign exchange reserves, Pakistan can only cover 18 days of imports and desperately needs the IMF to release the next tranche of its bailout programme to head off a potential default.