Pakistani Rupee Sinks To New Low At 236 Per US Dollar

The Pakistani rupee continued to sink against the US dollar for the ninth straight session in the interbank market, hitting a new record low of 236 on Wednesday.

The figures released by the State Bank of Pakistan (SBP) showed the greenback closed at an all-time high of 236.02 rupees in the interbank market, up from 232.93 rupees a day earlier as it shed 1.31 per cent, the Dawn newspaper reported.

Since the start of 2022, the rupee has lost over 30 per cent of its value, according to the Foreign Exchange Association of Pakistan.

On Wednesday, Pakistan Minister for Finance and Revenue Miftah Ismail expressed hope that the pressure on the rupee would ease in a couple of weeks.

“From the next month onwards, incoming dollars in Pakistan by way of exports and remittance will be more than the outgoing dollars by the way of imports and debt servicing. Therefore, pressure on the rupee would subside and the currency would appreciate,” said Ismail.

He said that multiple factors including the US dollar reaching historic highs internationally, interest rate hikes, worldwide inflation and supply chain disruption have led to the rupee’s depreciation.

Earlier this month, the IMF reached a staff-level agreement with Pakistan authorities for the conclusion of the combined seventh and eighth reviews of the Extended Fund Facility (EFF).

Despite the agreement, the ongoing political and economic turmoil in the country has raised concerns among investors, Pakistan’s Business Recorder reported.

This downfall of Pakistani rupees comes as Moody’s Investors Service and Fitch Ratings said they expect Pakistan to secure the USD 1.2 billion bailout from the International Monetary Fund (IMF).

Once the deal amount will be secured, it is expected that pressure on the country’s currency and forex reserves will ease.

“We assume IMF board approval of Pakistan’s new staff-level agreement with the lender,” Krisjanis Krustins, a Hong Kong-based director at Fitch, was quoted as saying by Bloomberg on Wednesday. “This will unlock significant additional financing from the IMF and other multilateral and bilateral sources and may well provide a significant confidence boost to the markets.”

Grace Lim, a sovereign analyst with the rating company in Singapore, said Moody’s expects IMF to disburse the funds in the third quarter.

This comes after Fitch Ratings downgraded Pakistan’s outlook from stable to negative in view of the significant deterioration in the country’s external liquidity position and financing conditions since early 2022.

Earlier, Moody’s downgraded Pakistan’s outlook to negative from stable in June. (ANI)