ISLAMABAD: For the first in the history of Pakistan, the US dollar crossed the 200-mark in interbank trade on Thursday.
With a fresh decline of Rs1.61, or 0.81%, the local currency was closed at Rs200 against the greenback on Thursday, State Bank of Pakistan (SBP) reported.
The domestic currency has maintained the downturn on the 10th consecutive working day as it cumulatively lost 7.7% or Rs14.31 in the last ten sessions.
The local unit hit a record low of Rs188.66 on May 10. It then plunged to Rs190.02 on May 11, fell over Rs191 on May 12, reached Rs192.52 on May 13, sank below Rs194 on May 16, down to Rs195.74 on May 17 and closed at Rs198.39 yesterday (May 18).
It is worth mentioning that the country follows a market-based exchange rate where the currency moves are determined by the market forces of demand and supply.
Since the beginning of this fiscal year (July 1, 2021) to date, the rupee has collectively dropped by a massive 26.95% (or Rs42.46) 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 31.34% (or Rs47.73) to date, compared to the record high of Rs152.27 recorded in May 2021.
The US currency stayed above the important milestone surpassed a day earlier and closed at Rs201.5 in the open market today.
Revival of the IMF programme has become a necessity for Pakistan in order to curb dollar flight, former finance minister Dr Hafiz Pasha told Geo.tv.
“In the next few days, rupee-dollar parity depends on how talks with the Fund mission unfold,” he said, reiterating that if Pakistan’s delegation successfully convinces the IMF to revive the stalled multibillion-dollar programme then the local currency will stabilise.
Regarding the government’s reluctance on taking tough decisions to meet IMF conditions, the former finance minister said that despite the delay, the international body will show “flexibility” following a statement from the US regarding Pakistan’s economy.
“This time the IMF’s attitude towards the Pakistani delegation will be different because of the US. Pakistan now needs to focus on convincing them [IMF mission] that the country will increase revenues even if they decide against removing subsidies on petroleum products,” he maintained.
A day earlier, a US State Department spokesperson promised Pakistan strong US support for its efforts to restore the economy shortly after FM Bilawal Bhutto-Zardari arrived in New York for a series of meetings including a bilateral one with US Secretary of State Antony Blinken.
Pasha, however, emphasised that if Pakistan moves towards fresh polls this will “negatively” impact the local currency. “Call for fresh elections would create uncertainty in the short run,” he said, adding that Pakistan would also have to stall the IMF programme because the caretaker government does not have enough powers to involve in discussion with the Fund.
“It is important for the new government to present a proper federal budget for the fiscal year 2022-23 which is the second important factor that would play role in stabilising rupee-dollar parity,” he concluded.
As the dollar busts all the previous records today, Prime Minister Shehbaz Sharif took notice of the continuous surge in the value of the greenback in the country and convened a high-level meeting to discuss the country’s economic situation.
Top officials of the ministries of finance, trade and FBR will be among the attendees of the meeting. During the meeting, the prime minister will be briefed about the imports and exports.
The meeting will also discuss measures to stop the continuous rise in the value of the dollar. A report relating to the implementation of the ban on the import of ‘luxury items’ will be presented to the premier.