Dollar hits all-time high of Rs148 mark
The Pakistani rupee plunged to an all-time low on Thursday against the US dollar as dollar touched another all-time high for the second consecutive day, reaching approximately Rs148 in the interbank market during trading before closing at Rs147.10.
The greenback was recorded an increase of Rs2.5 against the local currency to reach Rs146.25 in the open market.
The dollar had gained Rs2.25 against the rupee in the open market yesterday amid strong speculation that the rupee would depreciate significantly after the signing of a bailout agreement with the International Monetary Fund (IMF).
Thursday’s drop marks the seventh consecutive devaluation of the currency — one of the worst in Asia — since December 2017. It coincides with a recent increase in gas prices — the two major conditions reportedly demanded by the IMF in exchange for the bailout program.
The fall in the rupee’s value comes a day after Prime Minister Imran Khan set up a committee, headed by Adviser to the PM on Finance Dr Hafeez Shaikh, to control devaluation of the local currency and capital flight from Pakistan.
According to of Pakistan Forex Association chairman Malik Bostan, financial markets responded negatively to the IMF provision amid speculations of further depreciation over the past two days during which the currency plummeted Rs9 against the dollar.
He stressed that the rupee fell by over 7 percent towards noon after having dollar traded at Rs 141-142 to the dollar in the morning, amid rising fears of further inflation and hikes in the prices of essential commodities.
“Fears of further devaluation as a result of the agreement with the IMF have depressed the currency market and the rupee may lose more against the greenback in the coming days,” Secretary General of Exchange Companies Association of Pakistan Zafar Paracha had said on Monday.
Most of the currency dealers and experts have already expressed their disappointment over the undisclosed conditions agreed between the IMF authorities and the government.
The rate in the interbank is considered the official exchange rate but the open market rate fluctuations and shortage of dollars sometimes compel the State Bank to change the exchange rate. The SBP usually uses banking rates for devaluation of the rupee.
Pakistan People Party (PPP) has expressed strong reservation over the increase in dollar rate.
PPP central leader Sherry Rahman said “The government is accepting terms before reaching agreement with IMF. In open market the dollar determines its value by its self and the experts say that the dollar will go up further. Its second time that such enormous increase has been witnessed in the rate of dollar”, she said.
“The government is breaking the record of its failures. I hope Prime Minister will take action after watching news on TV. Government’s difficult policies made the survival of common man difficult, “PPP leader said.
The Islamabad Chamber of Commerce & Industry President Ahmed Hassan Moughal, Senior Vice President RafatFarid and Vice President Iftikhar Anwar Sethi showing great concerns over record devaluation of rupee urged government to take immediately remedial measures to bring stability in the local currency in order to save the economy from further troubles.
They said the rupee has already witnessed hefty depreciation against dollar due to which people were badly suffering from rising inflation while cost of doing business has gone up significantly. They were afraid that if rupee continued to fall against dollar, it would bring business activities to a standstill and put unbearable burden on the common man.
ICCI President said that industry was importing about 60 per cent of raw material for manufacturing activities while Pakistan was also importing fertilizer, food items, oil, machinery and many other items. He said the abrupt devaluation of rupee further enhanced the cost of doing business, increased inflation and slowed down economic growth.