Pakistani rupee continued its downward trajectory against the US dollar for the 18th consecutive session amid political turmoil and a fall in foreign exchange reserves of the country, plummeting to a fresh all-time low of 186.13 on Tuesday.
The State Bank of Pakistan (SBP) said in a statement that the dollar opened at Rs185.23 in the interbank market and closed at Rs186.13 after shedding Rs0.90 (-0.48 percent).
The rupee witnessed a trading range of 102 paisas during the session, showing the intra-day high bid of 186.25 and a low offer of 185.45. Within the open market, the rupee was traded at 186/187.20 per dollar against 185.50/186.50 a day earlier.
The rupee has set 17 all-time lowest levels in the interbank market against the greenback during the last 19 sessions. Overall, the rupee shed Rs2.04 against the US dollar during the last two days, while the local unit devalued by Rs28.70 during the ongoing fiscal year 2021-22 and Rs9.68 during the current year 2022.
According to currency dealers, political instability in the country, lingering talks with the International Monetary Fund (IMF) and higher commodity prices in the global market have badly hit the stability of the rupee in the interbank.
They said that political uncertainty has created a negative sentiment overall for the economy and this has been negatively impacting the rupee value against the dollar.
They said that early settlement of the ongoing early resolution of the crisis and the Supreme Court ruling on the matter can bring some clarity and stability; otherwise, the currency will have to endure a sharp decline in days to come, threatening to add inflationary pressure with a possible hike in interest rate.
They also attributed import payments as a factor contributing to a fall of the rupee. They said the pressure on the country’s foreign exchange reserves pushed by the draining of dollars from stocks and government securities has also played havoc with the rupee value.
The SBP reported last week that the foreign exchange reserves of the country dropped on a week-on-week basis to $18.55 billion.
According to the SBP data, the foreign exchange reserves held by the central bank decreased to $12,047.3 million, while net reserves held by commercial banks amounted to $6,507.2 million. The falling reserves are sufficient to cover the import bill for two months only.