The Pakistani rupee fell to an all-time low of 191 rupees for the dollar on Thursday after an ongoing political crisis shook confidence in the currency.
The rupee has been falling for months, but the drop turned abrupt in March when opposition parties tabled a no-confidence vote against Prime Minister Imran Khan that led to the dissolution of the national assembly last week.
The rupee has lost more than six percent in a month and the open market saw interbank rates of 191 — and 189 on Thursday.
“The political mess is a result of uncertainty and this is having a negative impact on the rupee,” said Mohammad Sohail, head of Topline Securities, a Karachi-based brokerage and economic research firm.
Pakistan’s Supreme Court met on Thursday to rule on the legality of political maneuvers that led Mr Khan to dissolve the National Assembly.
Pakistan’s foreign exchange reserves, which depend on remittances from the expatriates, have failed to halt a growing trade deficit.
Reserves have fallen to $12 billion since March, from $16 billion, when the deficit was 70 percent for the nine months of fiscal year 2021-22.
Since July 2021, the rupee has lost 18 percent of its value against the dollar.
Relations with the United States and the International Monetary Fund (IMF) are also critical factors.
The IMF has approved a $6 billion bailout package for Pakistan to bolster the balance of payments issue in 2019.
Half has been paid out, but the rest is being renegotiated.
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