Pakistani rupee in free fall against US dollar

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The Pakistani rupee dropped to a historic low of 191 rupees to the dollar Thursday as an ongoing political crisis rocked confidence in the currency.

The rupee has lost over six percent in a month, and on the open market Thursday was at 191 — and 189 at the interbank rate.

“The political mess has ensued from uncertainty and this badly reflects on the rupee,” said Mohammad Sohail, chief of Topline Securities, a Karachi based brokerage and economic research house.

Pakistan’s foreign exchange reserves, which rely on remittances from the diaspora, have failed to stop a growing trade deficit. Reserves have fallen to $12 billion from $16 billion since March as the deficit hit 70 percent for the nine months of the fiscal year spanning 2021-22.

Since July 2021, the rupee has lost 18 percent of its value against the dollar. Relations with the United States and International Monetary Fund are also critical factors.

 

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