Rupee falls 2.55 further; dollar crosses threshold of Rs210

News of banks running out of dollars has increased pressure on rupee

Picture source - Reuters

The Pakistani rupee fell further as US dollar crossed the threshold of Rs210 in the interbank market on Monday.

The rupee depreciated by Rs2.55, hitting an all-time lowest value of Rs210.3 on Monday morning, the Forex Association of Pakistan (FAP) has said. On Friday, the domestic currency closed at Rs207.75.

Today, the greenback was trading at Rs212 in the open bank market at 11:00am PST.

According to media reports, the news of banks running out of dollars has increased pressure on the Pakistani rupee causing further devaluation.

Mettis Global, a web-based financial data and analytics portal, has reported that during the five consecutive sessions of the previous week, rupee has fallen significantly. According to the report, the delay in the Pak-IMF deal would result in further depletion of the country’s foreign exchange reserves, causing the rupee to fall down further and hence the economic crisis could turn more serious.

Zafar Paracha, the general secretary of Exchange Companies Association of Pakistan, has raised concern over the obliviousness of authorities due to which the distress in the market is prevailing. He emphasized the government to take immediate steps to improve the conditions raising concerns of a Sri Lanka-like default happening.

Pakistan’s reserves have so far depleted to the lowest value below $15 billion, of which the central bank is only left with $9 billion, according to the State Bank of Pakistan (SBP).

According to reports by economic experts, if the condition of uncertainty continues, the rupee would keep devaluating. The only way to sustain the situation lies with the receipt of fresh inflows, including the loan from the IMF.