Political turmoil sinks Pakistani rupee to record low against dollar
Local currency loses over six rupees in value against the greenback
May 10, 2023 11:15 AM
A day after Pakistan was rocked by violent protests triggered by the shock arrest of PTI Chairman Imran Khan, the Pakistani rupee was crashed to historic low against the US dollar in the interbank market on Wednesday, reported 24NewsHD TV channel.
According to the State Bank of Pakistan, at the start of the business the local currency resisted pressure from the greenback but later it could not sustain it and crumbled, losing massively by Rs6.38 in its value.
The US dollar ended the day at Rs290.22, a record high.
During the last three business days, the greenback had been appreciated by Rs6.63 in value against the Pakistani rupee.
On Tuesday, the Pakistani rupee had sustained losses against the US dollar, settling with a depreciation of 0.35%. The local currency closed at 284.84, a decrease of 99 paisas.
In a related development, Moody’s Investor Service warned that Pakistan could default without an International Monetary Fund (IMF) bailout, as the country faces uncertain financing options beyond June, according to Bloomberg on Tuesday. “We consider that Pakistan will meet its external payments for the remainder of this fiscal year ending in June,” Grace Lim, a sovereign analyst with the ratings company in Singapore, was quoted as saying by Bloomberg.
“However, Pakistan’s financing options beyond June are highly uncertain. Without an IMF programme, Pakistan could default given its very weak reserves.”
Meanwhile, the Ministry of Finance on Tuesday said the government had made arrangements for the repayment of $3.7 billion debt due in May and June.
Pakistan is desperately seeking to resume its bailout programme that had been stalled at the ninth review since November last year.
Reporter Ashraf Khan