Pak rupee set sights on 200 mark against US dollar

The Pakistani rupee resumed its slide as the rising demand for US dollar kept the currency under pressure when the trading resumed on Monday.

The South Asian nation currency crossed another milestone by breaching 194 mark against the greenback (52.86 against the dirham) in the interbank-market, reflecting a decline of Rs1.47 from the closing figure of 192.53 (52.46 against the dirham) on Friday. It is the fresh all-time low against the US dollar and market insiders expect that the rupee may soon breach 200 mark (54.5 agsinst the dirham) for the first time in the history of Pakistan.

In open market, the US currency was difficult to buy even on higher rates as the dealers reluctant to sell the greenback amid hopes of gaining more profits in the wake of declining trend on account of uncertainty over political and economic fronts.

Regime-change impact

Analysts and market experts attributed the recent decline in the rupee’s value to delay in decision making and a stalled International Monetary Fund (IMF) programme.

In first 35 days of present government, who came into power after winning no-confidence move against the cricketer-turn politician Imran Khan on April 11, the rupee shed 11.50 of its value against the US dollar (3.13 against the dirham).

“The rupee remained under pressure and sustained a downward trend because the US dollar is gaining strength against other major global currencies for the past few days,” they said.

Panic buying

Another currency dealer said the market reacted negatively to the government’s decision to keep prices of petroleum products unchanged. He said panic buying is also seen due to shortage of dollars and depleting foreign exchange reserves of the country.

Pakistan is expected to revive talks with IMF team in Doha on May 18 to restore $6 billion extended fund facility. Investors and currency dealers fear that currency may cross 200 mark if IMF programme remains in jeopardy and currency inflows from friendly countries will also doubtful.

In the previous week, the rupee lost 3.1 per cent of its value against the US dollar in the inter-bank market.

— muzaffarrizvi@khaleejtimes.com