The Pakistani rupee hit a new all-time low at Rs288 against the US dollar on Tuesday in the interbank market amid delays in the revival of the International Monetary Fund (IMF) loan programme and the looming high risk of default on foreign debt repayment.
The currency slumped 1% (or Rs2.86) to Rs287.90 against the greenback at around 10:23 am today. A day earlier, the rupee had closed at Rs285.04 per US dollar.
Last month, the rupee had hit a record low, closing at Rs285.09 per US dollar on February 3, 2023.
Market talks suggest that importers have resumed the panic buying of US dollars, while the supply of foreign currency remained low in the interbank market.
This situation is seen after the government said that Finance Minister Ishaq Dar would visit the United States on April 10-16 and make efforts to resume the IMF loan programme worth $6.5 billion.
The government said that during his visit, Dar will be attending the annual meetings of the IMF and World Bank along with other high officials in Washington DC.
Read Rupee just Rs0.05 away from all-time low
Pakistan has remained in talks with the Fund since late January to resume the programme stalled since November 2022.
The delay has caused choking inflows of foreign financing. Accordingly, the country’s foreign exchange reserves have depleted to a critically low level at $4.2 billion at present.
The low foreign exchange reserves pose a serious threat of a likely default on foreign debt repayment in the near future.
The government further said that Saudi Arabia has signaled a new bailout package for Pakistan, but how much and when it will be rolled out remains uncertain.
According to experts, the IMF and friendly countries have stopped aiding Pakistan due to heightened political and economic instability in the country.
A leading analyst said the market is facing increased demand for the dollars due to import payment pressure. He recalled that the government has fully reopened imports on the recommendation of the IMF.