Pakistan rupee tests new lows, hits 52 against UAE dirham

The Pakistani rupee remained under pressure and hit an all-time low against the US dollar as it dropped to 190 (Dh51.77 against the UAE dirham) in the interbank market on Wednesday.

The US dollar continued its upward spiral against the local currency in open market due to rising demand from traders and importers to clear their import bills. The rupee dropped to 194 to a dollar (52.86 versus the dirham) in open market and is likely to go further down in the coming days.

Analysts and currency traders said the rupee will remain under pressure until there is a stability on political front and talks with the International Monetary Fund are resumed next week in Doha. They said if political uncertainty continues for a longer period the rupee may cross 200 mark against the greenback due to shrinking forex reserves, lack of foreign currency inflows, higher oil and commodity prices in the international market.

Samiullah Tariq, research director at the Pakistan-Kuwait Investment Company, said rising dollar demand continues to exert pressure on Pakistani rupee and the government will have to take immediate measures to bring stability in the market.

“The government will have to resume talks with the IMF to restore $6 billion extended funds facility to ease pressure on the rupee," Tariq told Khaleej Times.

"As soon as we have an agreement with the IMF and reverse subsidies on electricity, gas and fuel, the rupee will start reverting to its actual market value," he said, adding that the rupee is unlikely to hit 200 mark against the dollar (54.50 versus the Durham) despite market speculation.

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Previously, the rupee hit a record low on April 7, 2022 when dollar was trading at Rs188.18 as political uncertainty gripped the country ahead of the ouster of former prime minister Imran Khan. However, the rupee recovered some of its value after the regime change and stable at Rs181.50 on April 16, 2022.

"The rupee has lost four per cent of its value against the US dollar since April 16," according to the central bank data.

The South Asian nation currency depreciated 17.1 per cent during the ongoing financial year 2021-22. It lost 7.1 per cent of its value in calendar year 2022 and is likely to remain remain under pressure in coming days.

-- muzaffarrizvi@khaleejtimes.com

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