KARACHI: The US dollar hit a record high of Rs 121 in interbank trading but settled at Rs 118 on Monday, after the State Bank of Pakistan (SBP) devalued the currency for the third time since December amid a worsening economy and speculation the country will need support from the International Monetary Fund.
According to foreign exchange dealers, the greenback, which was previously standing at Rs 115.63, rose by Rs 5.38 in interbank. The currency that shot up to its record-high in the inter-bank market has also peaked to Rs119.5 for buying and 120.05 for selling in the open market.
Meanwhile, increasing imports and a widening current account deficit were also cited as the possible reasons. Earlier this year in March, the US dollar had shot up by Rs4.93 in the interbank market to hit a high of Rs 115.50 before coming down to Rs 115 at the close of business.
According to Bloomberg, Pakistan’s rupee was already Asia’s worst-performing currency against the dollar since the start of December before Monday’s move.
Analysts predict Pakistan’s economic growth will slow in 2018 for the first time in six years. The nation’s foreign-exchange reserves have dropped to the lowest in more than three years, the current-account deficit has widened, while external debt and liabilities as a percentage of gross domestic product climbed to the highest in almost six years in the first quarter.