UAE: Pakistani rupee hits all-time low against dirham amidst turmoil following Imran Khan's arrest

Uncertainty over the resumption of the International Monetary Fund’s (IMF) bailout programme for Pakistan, the rising political temperature after the arrest of former prime minister Imran Khan and rising demand for US dollar have pushed the rupee to another all-time low on Thursday, falling below 300 against the dollar in the open market.

South Asian currency plunged below 80 against the UAE dirham on Thursday.

Protests have broken out across the country following the arrest of Khan, resulting in casualties in different cities. The government in Islamabad has called the country’s army to quell protests. Eight people have died in the protests between the public and security agencies so far.

While Islamabad and IMF have been negotiating more than $1 billion loans for quite some time but have failed to reach a deal till now.

Earlier this week, Moody’s Investors Service warned that Pakistan could default without IMF’s bailout package.

Pakistan's forex reserves stood at $4.46 billion during the last week of April.

According to xe.com, the rupee was trading at 80.87 against the UAE (297 against the US dollar) on Thursday afternoon.

But the rupee was trading at over 301 against the greenback and 81 versus the Emirati dirham in the Pakistani open market. While in the Pakistan interbank market, the rupee slumped to 290 against the dollar.

In the UAE, the rupee was being exchanged at close to 79 against the dirham for remittances.

Rajiv Raipancholia, CEO and managing director of Orient Exchange, said in January 2023, rupee was trading around 226 versus dollar (61.68 against dirham) and in May 2023 it has reached 290 (78.43 against dirham), depreciating around 26 per cent in five months.

“There are several reasons behind this. Firstly the demand for dollar in Pakistan is very high as compared to the supply which is very low, causing continuous depreciation. In addition, there is a lack of foreign investment which is causing a decline in the demand for rupee leading to its depreciation,” he said.

ALSO READ:

• UAE jobs: Emirates hires over 15,000 employees as company records 'most profitable year ever'

• Indian rupee opens lower against UAE dirham

• UAE: Gold prices drop in Dubai in early trade

• Business
• Pakistan