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| The rupee has fallen to a record low of 299 vs US Dollar |
Pakistani Rupee experienced a significant drop on Tuesday, marking a historic low as it depreciated by 0.6% against the US dollar in the interbank market. This decrease was attributed to the relaxation of import restrictions, which led to a heightened demand for the dollar.
As per the Exchange Companies Association of Pakistan (ECAP), the local currency saw a decline of 1.87 against the greenback, with the intraday trade showing an exchange rate of 299.
This new figure surpassed the previous record low of 298.93, recorded on May 11.
In the preceding day, the rupee had concluded at 297.13 against the dollar, compared to the previous day's closing rate of Rs 295.78.
Tahir Abbas, the Head of Research at Arif Habib, expressed his expectation that the rupee would fluctuate between 295 and 305 against the dollar in the near future. He attributed this downward trend to the easing of import restrictions, which in turn facilitated the clearance of accumulated goods and services backlogs. Additionally, he noted that multinational corporations were capitalizing on the situation to repatriate profits, thereby contributing to the outflow of rupee.
Offering insight into the situation, Adnan Agar, the Director of AA Commodities, explained that the decline in the rupee's value is primarily linked to political uncertainties. The fears of potential delays in general elections, and consequently the postponement of commitments to international bodies such as the International Monetary Fund (IMF) and other global lenders, were highlighted as factors influencing this depreciation.
Agar emphasized that the ongoing political ambiguity, particularly with a caretaker administration in control, gives rise to concerns about investment and lending prospects for the country. He underlined that this prevailing uncertainty is the primary driver behind the rupee's downward trajectory. As per Agar, this situation is likely to persist until there is greater clarity regarding the political landscape.
