Islamabad: The Pakistani rupee on Wednesday plunged to an all-time low to Rs 240 against the US dollar in the inter-bank market, making it the worst performing currency in the emerging markets this week.
This is the 14th consecutive day of the rupee’s depreciation, which is in a state of free fall and cumulatively lost around 12 per cent (or Rs 25.40) since August 1 when it closed at Rs 214.60, according to The Express Tribune newspaper.
In the recent past, the Pakistani currency hit its former record low of Rs 239.94 on July 28.
An emerging markets analyst said that the delay in inflows of promised funds from Gulf Cooperation Council (GCC) countries had impacted the rupee. Conversely, a month ago, the local currency won the title of the best-performing currency in emerging markets in August 2022.
The IMF approval of the loan tranche of USD 1.16 billion had also supported the currency’s stabilisation, the analyst said.
Experts said the rupee is weakening mainly due to the dollar strengthening against world currencies as the Fed hinted at increasing the interest rate by 0.75 per cent in the forthcoming monetary policy of the US.
Besides, losses incurred by the devastating floods increased the demand for the greenback to import agricultural products including cotton. Textile exporters are fearing losing orders amid high inflation in the west.
Accordingly, the Pakistani rupee may remain under pressure against the greenback.
In recent weeks, friendly Gulf countries including Saudi Arabia, the United Arab Emirates (UAE) and Qatar have pledged to invest a total of USD 6.2 billion in Pakistan over a period of 12 months.
Islamabad, however, has not yet given a concrete road map for the inflow of investment.
In the meantime, Saudi Arabia has rolled over deposits worth USD 3 billion in the State Bank of Pakistan (SBP) for one year. This is separate from the USD 6.2 billion investment pledged by the GCC economies.
The kingdom has yet to announce a plan as to how and when it will supply oil on deferred payments worth USD 1.2 billion over a period of 12 months, which is part of the GCC investment program, according to the paper.