0
0
The rupee was knocked down further by the US dollar in the inter-bank market on Wednesday, closing in on the 207 level during intra-day trading.
Reports indicate the rupee was being quoted around 206.5, a fall of Rs1.34.
On Tuesday, the currency had settled at the then-record low of Rs205.16.
New all-time low for rupee, US dollar closes over 205
Globally, the dollar held near its overnight 20-year peak ahead of the outcome of the Federal Reserve policy meeting at which markets are pricing in an outsized 75-basis-point interest rate hike as policymakers try to rein in rampant inflation.
A key US currency index, which tracks its performance against six peers, was at 105.3 on Wednesday having hit 105.65 a day earlier, its strongest level since December 2002.
Meanwhile, in Pakistan, market experts said the rupee too, is feeling the effects.
“Globally, inflation rate is moving upwards, as the US Fed is expected to raise the rate by 75 basis points, which is causing a rush towards the dollar,” Saad Khan, Head of Equities at IGI Securities, told Business Recorder.
At the same time, expectations of higher inflation in Pakistan along with the stalled bailout programme of the International Monetary Fund (IMF) are causing distress.
“Electricity and gas rates are expected to go up as well this month, which will ramp up inflation. However, resumption of funds from the IMF could help the rupee,” said Khan.
He added that recent statements from Finance Minister Miftah Ismail also paint a grim picture of the economy.
Addressing a conference, Miftah on Monday said that the world perceived the country at a serious default risk and Pakistan bond is being sold at below 80 cents.
He said other lenders have linked their loans to the IMF programme and during a meeting the World Bank has told him this, and the same was conveyed by the Asian Development Bank (ADB) as well.
Pakistan urgently needs funds in the face of dwindling foreign exchange reserves, which have reached $9.2 billion – enough for less than 45 days of imports.
The fall in reserves has put severe pressure on the rupee in recent weeks that has lost nearly 14% against the US dollar since March this year.
