The US dollar has touched a new all record high of Rs149 in the interbank market on Friday morning as the rupee continued to slide just days after Islamabad sealed a $6 billion bailout package with the International Monetary Fund (IMF).
Investors are speculating that the bailout includes tough conditions to reform the economy, leading to uncertainty.
The US Dollar gained by another Rs2.48 in the interbank market to reach the latest peak which is the third consecutive rise in three days. It is currently being bought for Rs147 in the interbank market. In the open market, it’s being sold for Rs. 150 already.
Pakistani Rupee has plunged more than 20% in the past year, making it the worst performer in a basket of 13 currencies in Asia compiled by Bloomberg.
President Forex Association of Pakistan Malik Bostan told a media outlet Wednesday that the rupee is expected to depreciate by a further 15 to 20 percent against the dollar by December this year.
However, the State Bank of Pakistan (SBP) on Thursday justified the Pak Rupee devaluation against the US dollar in interbank market and said this movement will help correct the market imbalances.
“Until the foreign exchange reserves situation improves, there is no [chance] of the dollar coming down,” he said.
Pakistan Stock Exchange:
The stock market continues to plunge down as the greenback rose. At the time of filing this report, the benchmark index KSE-100 lost over -966 points during the intraday today touching a low of 33,005 points.
The fresh depreciation and an expected increase in the interest rates prompted renewed stock selling as investors reacted with panic to the latest development.
The State Bank of Pakistan (SBP) is likely to tighten the monetary policy stance by increasing the policy rate.
The Central Bank (SBP) is expected to push interest rate up over 100 basis points to curb aggregate demand and ensure microeconomic stability.
The Monetary Policy Committee (MPC) of the State Bank will meet on Monday, May 20, 2019 for deliberation on key economic issues to take a decision on policy rate.
Newly appointed Governor SBP, Reza Baqir will chair the meeting of the committee.