Pakistani rupee falls to an all-time low of 300.2 against the US dollar

The Pakistani rupee reached a record-low closing value of 300.2 against the US dollar, breaking through the psychological barrier of 300 on Thursday. Data from the central bank indicated that this unwanted milestone was reached amid less curbs on outflows.

On Wednesday, the Pakistani rupee lost more ground, closing at 299.6 to the US dollar.

The rupee has lost 2.9 per cent of its value since the caretaker government assumed power on August 15, when it hit a record low for a third straight day.

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The administration is tasked with monitoring at least one review of the $3 billion standby agreement with the International Monetary Fund (IMF) and guiding the nation towards a general election, scheduled to take place by November.

In order to stop the drain on its dwindling foreign reserves, Pakistan introduced import restrictions beginning in 2022. The IMF rescue programme to support the crisis-hit economy had a clause to remove those restrictions from June this year.

“When you open up a restricted trade economy, it results in an initial overreaction,” Fahad Rauf, head of research at Ismail Iqbal Securities, told Reuters.

He added that increased inflation expectations have returned as a result of the government’s imposition of energy tariffs and increase in the price of petrol.

These steps are inflationary and put pressure on the rupee, he added.

(With inputs from Reuters)

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