Pakistani rupee hit a new record low of over 242 rupees against United States dollar in inter-bank market around noon on Thursday.
The local currency fell 2.64% (or Rs 6.24) to Rs 242.26 around 12:08 pm from Wednesday’s close. of Rs 236.02.
At the same time, the currency fell by almost 15% (or 31.31 rupees) during past 10 business days.
latest spicy drop in rupee seen after government reported a five-month high current account deficit (CAD) of $2.3 billion for month of June.
This took in full year CAD in second historical maximum of $17.40 billion in fiscal year which ended June 30, 2022 Massive surge in The CAD was funded by the country’s foreign exchange reserves.
Accordingly, stocks were depleted to six to a seven-week import coverage of $9.3 billion. of July 15, 2022, according to the central bank weekly update from last Thursday.
The rupee exchange rate continued decline together with falling reserves, analyst said.
On the other hand, renewal of foreign funding is expected in at least four weeks, the IMF chief executive said. board meeting is scheduled and give final OK for renewal of its loan program to Pakistan in end of August 2022.
Until then, Pakistan must manage import payments and debt payments with in available limited foreign exchange reserves.
Meanwhile the pressure on the rupee will rise and political instability play this is role in coinage of the local currency.