KARACHI: The dollar reached a new high in the interbank market Monday against the Pakistani rupee, surging past the Rs194-mark amid concerns over the government’s strategy to deal with the economic crisis.
According to data released by the State Bank of Pakistan (SBP), the rupee lost Rs1.65. or 0.85%, to close at Rs192.18 against the greenback in the interbank market.
The local unit has lost over Rs11 since the installation of the new government led by Prime Minister Shahbaz Sharif last month.
Experts have held the government’s policies responsible for the continuous decline of the rupee in the currency market.
While speaking to Geo.tv Arif Habib Limited Head of Research Tahir Abbas said, the market reacted negatively to the government’s announcement to keep prices of petroleum products unchanged.
“The decision taken by the government last night to maintain prices triggered the uncertain environment or the investors,” he said, explaining that the investors are now concerned regarding the revival of the stalled IMF programme.
It is worth mentioning that Pakistan and the IMF are scheduled to begin talks regarding the $6 billion loan programme from May 18 in Doha. The success of talks with the Fund was conditioned on the removal of subsidies provided by the Pakistani government on petroleum products.
The analyst further said panic selling is also seen due to a shortage of dollars and depleting foreign exchange reserves.
Despite Finance Minister Miftah Ismail’s assurance to stabilise the rupee-dollar parity and foreign exchange reserves, investors fear that if the IMF programme remains in jeopardy support from friendly countries will also remain a mystery.
The financial experts have been pressing the government to take difficult decisions in order to bring stability to the financial markets.
Prime Minister Shahbaz Sharif, who was in London last week holding meetings with the PML-N supremo Nawaz Sharif, is scheduled to take the heads of allied parties into confidence today and seek their approval before taking decisions on ending the subsidies on petroleum products.
Since the beginning of this fiscal year (July 1, 2021) to date, the rupee has collectively dropped by a massive 23.25% (or Rs36.64) compared to the previous fiscal year’s close at Rs157.54.
The rupee has maintained a downward trend for the last 13 months. It has lost 27.52% (or Rs41.91) to date, compared to the record high of Rs152.27 recorded in May 2021.