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Investors were concerned about the country’s deteriorating political scenario as the Pakistani rupee plunged to a record low of 299 against the US dollar in the early hours of trading on Thursday.
At around 1:17pm, the Pakistani currency fell Rs8.78, or 3.02%, against the dollar on Thursday trading at 299.
On Wednesday, the Pakistani rupee reached a record low against the US dollar, weakening by around 1.9% in the interbank market. As per the State Bank of Pakistan (SBP), the currency closed at 290.22, a decrease of Rs5.38.
According to experts, the decline is a result of growing scepticism regarding the International Monetary Fund’s (IMF) bailout program’s restart amid rising political tension.
The rupee depreciation has piled up foreign debt without taking new external loans, making imports further expensive for Pakistan, which faced a six-decade high inflation reading at 36.4% in April 2023.
In a key development, the Finance Ministry said on Tuesday arrangements had been made to repay or roll over this fiscal year’s $3.7 billion debt.
“This should not be any cause of concern as arrangements have been made for the rollover/repayment of this debt,” the ministry said in a statement.