Rupee Shatters All Records Against US Dollar Amid Tricky IMF Talks and Oil Drop

The Pakistani Rupee’s (PKR) hopeless collapse made history against the US Dollar (USD) and posted losses in the interbank market today.

It depreciated by 0.81 percent against the USD and closed at Rs. 200.00 after losing Rs. 1.60 in the interbank market today. The local unit hit an intra-day high of Rs. 197.80 against the USD during today’s open market session. So far, the dollar has gained Rs. 13.31 against the rupee since last week, and Rs. 17.06 since 11 April 2022.

Since the beginning of this fiscal year (July 1, 2021) to date, the local unit has cumulatively dipped by a massive 27 percent (or Rs. 42.45) compared to the previous fiscal year’s close of Rs. 157.54 against the greenback.

The rupee crossed the 200-mark against the dollar for the first time today after maintaining its downfall for the tenth consecutive day. The drop comes amid rising speculation over the ongoing talks between the government of Pakistan and the International Monetary Fund (IMF). While some analysts predict the rupee to fall further below Rs. 200 against the dollar in the interbank market, others forecast the currency to bounce back if the government commits to undertaking reforms envisaged under the IMF program.

Economic analyst, A. H. H. Soomro, told ProPakistani,

The psychological barrier is now broken. At Rs. 200, the government has decided to engage with the IMF and PDM has given a go-ahead to take tough decisions. Moreover, monetary policy decisions are already priced in. If the talks succeed and the government reverses fuel and power prices, then the Rupee plunge should reverse anytime.

In terms of global factors impacting the local economy, oil prices dipped by 2.5 percent in the early hours of the day, reversing early gains as traders grew less worried about a supply crunch after reports emerged that US refineries had ramped up crude output. Brent crude dropped as low as $108.1, while the US West Texas Intermediate (WTI) crude shed gains to settle at an even $108.

The PKR freefall continued against all the other major currencies in the interbank market today. It lost 55 paisas against the Australian Dollar (AUD), Rs. 1.12 against the Canadian Dollar (CAD), Rs. 1.22 against the Euro (EUR), and Rs. 1.53 against the Pound Sterling (GBP).

Moreover, it lost 42 paisas against the Saudi Riyal (SAR) and 43 paisas against the UAE Dirham (AED) in today’s interbank currency market.