KARACHI: There was no respite from the declining rupee trend on Monday as the currency dropped to a new all-time low of Rs181.35 against the US dollar in the inter-bank market during intra-day trade despite a decrease in the current account deficit.
The movement of the local currency against the greenback is being driven by sentiments, besides the demand and supply.
According to data released by the State Bank of Pakistan (SBP), rupee closed at Rs180.57 on Friday.
Moreover, the looming political crisis and worries about the next tranche of the International Monetary Fund (IMF) loan kept the currency under pressure.
There has been no progress on Pakistan and the IMF’s seventh review talks for the release of the next loan tranche following the breaches committed by the government on different fronts. The IMF showed concerns about the PM’s relief package.
However, Federal Minister for Finance and Revenue Shaukat Tarin claimed that Pakistan and the IMF staff-level agreement would be done this week as the Fund had sought details of the agreement between the Centre and provinces for financing PM’s Relief Package through which diesel, petrol, and electricity prices were frozen at the existing level till June 2022.
Contrary to the expectations of the market, the declining current account deficit failed to entice investors and the currency continued to drop to new lows.
Earlier, speaking to local media, Pakistan-Kuwait Investment Company Head of Research Samiullah Tariq had said that the currency is under pressure due to higher demand because of the commodity prices.
He had said: “The local currency is now showing signs of the impact of the recent commodity price hike witnessed in the international market.”