KARACHI: The rupee lost ground against the US dollar in the interbank market for the third straight session on Wednesday, falling by Rs1.3 to conclude the day’s trade around a two-week low of Rs172.93 per US dollar.
Over the previous five days, the local currency has shed roughly 1.71 percent.
Investors became skeptical of the IMF’s (IMF) program’s delay and assessed economic risks in the event that the government failed to achieve the fund’s terms.
Analysts noted that in recent sessions, dollar demand from importers remained persistently strong for settling payments, amidst worries that the next $1 billion tranches would be delayed owing to Islamabad’s uncertainty on satisfying the IMF’s severe requirements for the conclusion of the sixth review.
For the previous five months, the rupee has been on a downward trend. It has dropped 13.56 percent (or Rs22.66) after reaching a 22-month high of Rs152.27 in May.
The rupee has depreciated by 9.76 percent (or Rs15.39) from the beginning of the current fiscal year on July 1, 2021, according to statistics issued by the central bank.
The government must take urgent action since market uncertainty has begun to dominate.
“Whenever there is market uncertainty, big movements in the local currency are witnessed,” the expert had stated.
Abbas went on to say that the rupee’s devaluation causes inflation, which is negative for the economy since rising inflation implies the import bill would spread, boosting demand for the dollar.
“As soon as there is clarification on IMF, the marker will reverse its course,” he said.