Rupee hits record low amid uncertainty over IMF deal

By Staff Reporter

KARACHI: The rupee hits a new record low on Friday, touch 212 against the dollar in the open market amid uncertainty over a International Monetary Fund (IMF) deal, dealers said.
The local currency plunged 1.17 percent or 2.50 rupees. In the interbank market, the rupee closed at another all-time low of 208.75 to the dollar. It ended at 207.67 in the previous session. The rupee weakened 0.52 percent on a day-on-day basis.
Pakistan has been in talks with the IMF since last month to secure a $1 billion funding tranche, but its seventh review under the $6 billion Extended Fund Facility (EFF) remained inconclusive.
The government hoped to reach an agreement with the IMF later in the week.
The rupee has lost ground, taking cues from a sharper decline in the foreign currency reserves sparked by higher import bill amid global crude and other commodity prices. The dollar’s strength against major currencies also put pressure on the local unit.
The central bank’s reserves dropped 2.6 percent to $8.99 billion as of June 10, covering 1.32 months of imports. The fast-eroding reserves have threatened to intensify the balance of payments crisis. The sliding rupee is a negative for Pakistan, which is already facing double-digit inflation and soaring costs for fuel and power, which are both influenced by the rupee-dollar parity.