Pakistani rupee hits double century against USD

The US dollar reached the startling milestone of Rs200 in interbank trading on Thursday morning, gaining Re1 from the previous day’s close of Rs199, data by the Forex Association of Pakistan (FAP) showed.

According to the FAP, the US currency had reached the Rs200 mark — an all-time high — around 11am, reports The Dawn.

A day ago, the greenback had made a significant gain of more than Rs2 from Tuesday’s close and settled at Rs199 at the session’s end, which was the latest in a string of record highs that the US currency has been hitting since last Tuesday.

While the FAP recorded the previous day’s closing rate at Rs199, data released by the State Bank of Pakistan stated the closing rate as Rs198.39 — still remarkably close to the Rs200 milestone that the international currency was being anticipated to reach earlier in the day on account of the country’s rising import bill, growing current account deficit and depleting foreign exchange reserves.

The dollar’s value already reached Rs200 in the open market on Wednesday.

Why is Pakistan rupee falling?

Importers in Pakistan continued to buy dollars, fearing that the International Monetary Fund (IMF) would not resume the loan programme, according to local media reports.

Another reason for the depreciation of the Pakistani rupee is due to the risk of default.

Experts have said that Pakistan badly needs the resumption of the IMF’s loan programme to avoid the risk of defaulting on international payments, including foreign debt repayments and import payments.

Pakistan opened long-delayed talks with the International Monetary Fund on Wednesday, seeking the release of more funds from a $6 billion rescue package agreed in 2019 to help shore up the South Asian nation’s battered economy.