KARACHI: The US dollar touched an all-time high of Rs148 in the interbank market on Thursday morning, a day after bouncing back to Rs144 in the open market.
The greenback gained by Rs5.61 – approximately 4 percent – to be sold for Rs147 in the interbank market. It is currently being bought for Rs146 in the interbank market.
The latest depreciation in the rupee comes following Pakistan’s agreement with the International Monetary Fund (IMF) for a $6 billion bailout on Sunday.
The dollar climbed to an all-time high of Rs146.25 in the open market on Wednesday, before bouncing back to Rs144.
Following Wednesday’s hike, Prime Minister Imran Khan ordered authorities to take action against foreign exchange companies selling the dollar at higher rates.
OPP EXPRESSES RESERVATION:
Commenting on the recent surge in dollar price, Pakistan Muslim League-Nawaz (PML-N) leader Ahsan Iqbal said that the current government seems to think of rupee devaluation as a football which just keeps on getting kicked.
The former interior minister said that the PML-N will give a tough time to the government over its ‘anti-poor’ economic policies.
Pakistan People’s Party leader Sherry Rehman also lashed out on the rupee devaluation and called it another failed tactic of the ‘revolutionary government’.
“Dollar has reached an all-time high in the country’s economic history. It is the second time a surge has been witnessed. The revolutionary government is breaking its own records of failure,” Sherry said.
She said that the federal government’s ‘anti-public’ decisions have made it miserable for an ordinary citizen to survive.
“I hope that Prime Minister Imran Khan will take notice of the issue after viewing the issue on television,” the PPP leader said.
IMF DEAL AND MONEY DEVALUATION:
Pakistan’s $6 billion bailout agreement with the IMF, signed on Sunday, has met with serious criticism, as investors and analysts have expressed serious doubts over the reported conditions of the deal.
“Fears of further devaluation as a result of the agreement with the IMF have depressed the currency market and the rupee may lose more against the greenback in the coming days,” Exchange Companies Association of Pakistan (ECAP) Secretary General Zafar Paracha told a private media outlet.
Yawaruz Zaman, head of Research at Shajar Capital in Karachi, also agreed that the investors have taken the IMF conditions negatively, “especially with regard to the free float of the rupee against the dollar and increasing the interest rate”.
The currency market has been witnessing an acute shortage of US dollars for the last few days.
“I have been struggling to purchase dollars for the last two days. Currency dealers are either saying they don’t have the currency or they can only give up to a certain amount,” said local businessman Amir Shah, who says the dollar has gone “scarce” amid rupee’s free float.
“I could only manage to get $1,000 yesterday and $500 today after spending hours on the roads,” he said.
Meanwhile, business experts have predicted that apart from the devaluation of the rupee, the upcoming ‘IMF-sponsored budget’ would also result in the contraction of the troubled economy and would take a toll on the masses already struggling to make ends meet.
The new taxation measures to improve the revenue collection would also hit the business community and the masses, widen the gulf between taxpayers and tax collectors, and promote tax evasion, they added.
