Rupee sinks to record 197 against USD in inter-bank market
The fall of Rupee marks the eighth day in a row -according to the sink, which culminates in a 6% decline (or RS11.30) to RS196.99 to date.The devaluation of local currencies came ahead of the temporary discussion of Pakistan with the International Monetary Fund (IMF) in Doha on Wednesday (tomorrow) to revive the multi-miliar dollar loan program that was jammed.
Rupee’s decline in reactioner emerged given the skepticism in the market. Stakeholders assume that financial supervisors will not approve the start of the program after the government’s reluctance to apply prerequisite conditions.The IMF previously told the government to withdraw subsidies on petroleum and electricity products, upside down the industrial amnesty scheme and increase tax rates in the upcoming fiscal budget.
Industrial experts believe that this country really needs the revival of the program to avoid an increase in the risk of default in international payments, especially on imports and payment of foreign debt.In addition, the country’s foreign exchange reserves have been running low to a very low level, showing only six weeks the cover of imports compared to the closing of the usual three -month imports.
Uncertainty resulted in panic importers buying foreign currencies on limited supply, because exporters chose to delay receiving their payments from foreign buyers about speculation that rupees could test around the RS200 immediately.The widening gap between demand and supply of foreign currencies has increased pressure on the rupee.Experts believe that the government must make difficult decisions to handle the increasing economic crisis or announce the SNAP election.
