KARACHI, Pakistan – The Pakistani rupee fell to a record low in the interbank market on Tuesday due to an easing of the exchange rate. import restrictions That has increased the demand for the dollar.
Pakistan imposed restrictions on imports from 2022 to stem outflows of its dwindling foreign exchange reserves. The removal of those restrictions starting in June was a condition of a $3 billion International Monetary Fund lending program to help the crisis-ravaged economy.
Traders said the rupee fell 0.6% to an intraday low of 299 against the dollar. On May 11, it recorded an all-time closing low of 298.93. That was two days after former Prime Minister Imran Khan was arrested on land corruption allegations, further plunging the country into political turmoil.
Pakistan is currently governed by an interim government tasked with guiding the country toward a national election that should theoretically take place in November, while dealing with scorching political tension, as well as historically high inflation and interest rates.
Tahir AbbasHead of research at Arif Habib, a Karachi-based brokerage, said he expected the rupee to trade between 295 and 305 per dollar for the time being.
“The downward trend can be mainly attributed to the easing of import restrictions along with the clearance of outstanding orders for goods and services,” it said.
He added that multinational corporations were able to repatriate some profits, encouraging rupee outflows.
Pakistan imposed restrictions on imports from 2022 to stem outflows of its dwindling foreign exchange reserves. The removal of those restrictions starting in June was a condition of a $3 billion International Monetary Fund lending program to help the crisis-ravaged economy.
Traders said the rupee fell 0.6% to an intraday low of 299 against the dollar. On May 11, it recorded an all-time closing low of 298.93. That was two days after former Prime Minister Imran Khan was arrested on land corruption allegations, further plunging the country into political turmoil.
Pakistan is currently governed by an interim government tasked with guiding the country toward a national election that should theoretically take place in November, while dealing with scorching political tension, as well as historically high inflation and interest rates.
Tahir AbbasHead of research at Arif Habib, a Karachi-based brokerage, said he expected the rupee to trade between 295 and 305 per dollar for the time being.
“The downward trend can be mainly attributed to the easing of import restrictions along with the clearance of outstanding orders for goods and services,” it said.
He added that multinational corporations were able to repatriate some profits, encouraging rupee outflows.