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Sunday February 25, 2024

Rupee down in the dumps as dollar continues to flex muscles

Rupee closes at an all-time low of 269.63 against dollar in interbank market after losing Rs7

January 30, 2023
A dealer counts US dollars at a money exchange market in Karachi on January 26, 2023. — AFP/File
A dealer counts US dollars at a money exchange market in Karachi on January 26, 2023. — AFP/File

The rupee continued its downward slide for the third consecutive day on Monday, losing Rs7.03 to a dollar or 2.61% to close at a new all-time low of Rs269.63 against the greenback in the interbank market.

The rupee’s free-fall came after the coalition government ended its control on its price in order to woo the International Monetary Fund (IMF) officials to revive the $7 billion loan programme.

On Friday, the local unit closed the day at an all-time low of 262.6 against the greenback after a decline of Rs7.17.

With the latest drop, the domestic currency has cumulatively slumped by 14.36% or Rs38.74 in the three days, compared to Wednesday’s close of Rs230.89 to a dollar, according to the State Bank of Pakistan (SBP) data.

In over two hours of today's trading session, the currency hit an intra-day low of Rs270 during the day, according to the Exchange Companies Association of Pakistan (ECAP).

Meanwhile, the association reported that the currency was changing hands with the dollar at 275 in the open market. 

The ECAP in its briefing mentioned that most analysts are of the view that the rupee will weaken to 275, and then consolidate towards the 270 level as IMF approves the programme.

The association, however, predicted that the market will struggle to go above 270 in the short term, correcting to 265 levels, if there is no negative news on the IMF or the political front.