KARACHI: The Pak rupee could touch the lowest value of Rs155 against dollar as the IMF has also recommended depreciating local currency to Rs145.
The rupee which closed trading at Rs124.27 on Monday shot up to Rs134 on Tuesday in the interbank market before touching a record high of Rs139 before falling to Rs134 against the greenback.
Sources revealed that this trend shows that it has started from 107 and touched 139 mark in a short period of few months and the same technical trend shows it could even touch the lowest mark of 155 vs US dollar.
Today, the rupee has weakened by 10.24 per cent against the dollar in the inter-bank market to range between Rs137 to 139, according to media reports.
This indicates the State Bank of Pakistan (SBP) has decided to let the local currency depreciate in line with IMF recommendations which wanted to see the rupee at Rs145 against the dollar.
In a statement to Reuters, Abid Qamar, the SBP spokesman said, “The market is aware about the overall macro-economic conditions and based on those conditions, they are having their own expectations about the exchange rate, so that is driving (the rupee valuations) currently.”
This is the fifth devaluation of the rupee since December 2017, which has seen the local currency losing a cumulative 26 per cent of its value against the greenback.
According to an analyst, the interbank market rates for the rupee to a dollar were ranging between Rs137 to Rs139 and the kerb market was quoting its own rates.
As per the local money market, the dollar gained Rs5.30 in open market for buying at Rs132.50 and Rs6.30 for selling at Rs134. The dollar also added Rs9.15 in interbank for buying at Rs 133.25 and Rs9.45 for selling at Rs133.75.
On Monday, the dollar added 45 paisas in open market for buying at Rs127.20 and for selling at Rs127.70. The dollar remained unchanged in interbank for buying at Rs 124.10 and for selling at Rs124.30.
The government on Monday decided to officially approach the International Monetary Fund for a bailout as the KSE-100 index had plummeted 1328.09 points, continuing a losing spree of six consecutive sessions.
The devaluation had been imminent since the rupee had been diminishing in value against the greenback since the start of October.
As per media reports, IMF and Pakistan had disagreed over the exchange rate parity, as the State Bank of Pakistan (SBP) believed the exchange rate of Rs137 to a US dollar by end of the current financial year 2018-19 would be enough to address the challenges.
Sources said that IMF’s determination was to the contrary and they wanted the rupee to be traded above Rs145 to a dollar.