Rupee slide continues

KARACHI: The rupee fell to a new record low for seventh day in a row amid on-going political turmoil in the country and uncertainty about International Monetary Fund (IMF) loan programme, traders said.

The local unit ended at 181.73 to the dollar on Tuesday, down 0.26 percent from Monday’s close of 181.25 in interbank market.

The domestic currency has lost 1.53 percent of its value against the dollar in last seven sessions, and 15.35 percent since July 2021.

In the open market also, Pakistani currency lost 50 paisas to close at 183 per dollar.

Traders said political uproar ahead of no-confidence motion against Prime Minister Imran Khan and vagueness about the International Monetary Fund (IMF) loan progamme would further weigh on the rupee.

“The political turmoil is giving a bad impression about the future direction of the country’s economy,” said a foreign exchange trader.

“Any delays in disbursement of the next loan tranche from the IMF’s Extended Fund Facility will add to the negative view,” he added.

He was of the view that reviving investors’ confidence was inevitable to put a stop to downward trend of the rupee.

A good news in times of political uncertainty was reduction in the current account deficit.

The current account deficit shrank 78 percent to $0.5 billion in February, which is the smallest deficit so far this fiscal year.

However, the country ran a deficit of $12.1 billion in eight months of the current fiscal year.

It was in the surplus of $994 million in the same period last year.

The 48th session of the Council of Foreign Ministers (CFM) of Organisation of Islamic Cooperation (OIC) has started in Islamabad to discuss challenges being faced by the Muslim world and emerging opportunities.

The Parliament will meet on Friday to take up a no-confidence motion against the Primer.

In a move, the government asked the Supreme Court to give advice if it could seek lifetime disqualification of several ministers from the ruling party, who withdrew support for Khan ahead of a no-confidence vote.

There are fears that Pakistan may not be able to draw the next tranche of IMF’s Extended Facility as the Fund asked the government to explain how it would fund a $1.5 billion fuel and electricity subsidy package announced by PM Imran Khan last month.

The rupee is likely to remain under pressure until the political dust settles.