Dollar shatters Pakistani rupee to reach all-time high in interbank

Amid a standoff on an agreement between the IMF and Pakistan, the American currency gained a record Rs18.98 to bounce to Rs285.09 against the rupee at the closing time of interbank trading.

According to forex traders, the US dollar has gained a staggering Rs25.17 in three days.

The government’s impasse with the IMF has brought about a record drop of 6.6% in the local currency against the mighty dollar.

Forex experts termed the standstill between the international lender and Pakistan’s economic wizards behind the fresh plunge in the forex market on Thursday.

Despite a number of steps in recent weeks by the Pakistani authorities, including imposing a Rs170 billion mini-budget and increasing the gas and power tariff and most recently ending a crucial subsidy to farmers, the local currency could not stand in front of the powerful greenback.

On Wednesday, the statistics bureau released data that showed record high inflation, which hit 31.5pc year-on-year in February – an all-time high in the last 50 years.

Open market situation

In a shocking turn of events, the US dollar surged by a whopping Rs18 in the open market at the opening of Thursday, causing widespread panic and chaos in the country’s financial markets.

The value of the greenback was recorded at Rs292 at the closing session. The local currency has fallen by Rs22.2 or 67.82% over the last two days in the open market.

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The rupee continued a significant loss of value for the second consecutive day since the government reinstated the market-based exchange rate on the directive of the International Monetary Fund.

Read Also: Inflation spikes to decades-high as IMF standoff continues

The sudden surge in the value of the US dollar has caught everyone off guard, leaving investors and traders scrambling to make sense of the situation.