The Pakistani rupee fell further against the US dollar on Wednesday, falling by more than 1% in the interbank market.
Around 12:25 pm, the currency was quoted at 287.95, a Rs3.11 decline.
On Tuesday, the rupee fell further against the US dollar, finishing at 284.84 in the interbank market.
Experts believe the rupee’s devaluation is due to increased uncertainty over the resumption of the International Monetary Fund (IMF) bailout plan, as well as heightened political tensions.
“Political volatility has exacerbated market uncertainty regarding the IMF programme,” said Samiullah Tariq, Head of Research at Pak-Kuwait Investment Company.
The remarks came after the National Accountability Bureau (NAB) detained Pakistan Tehreek-e-Insaf (PTI) Chairman and ex-Prime Minister Imran Khan on Tuesday using Rangers personnel in the Al-Qadir Trust case, sparking major protests in both twin cities and across the country.
The Finance Ministry announced on Tuesday that plans had been established to repay or roll over this fiscal year’s $3.7 billion debt.
“This should not be cause for concern because arrangements for the rollover/repayment of this debt have been made,” the ministry stated in a statement.
Pakistan’s economy has been in turmoil for months as a result of a severe balance of payment crisis, with central bank reserves dwindling to fund only a month’s worth of restricted imports. Concerns have been raised that the South Asian country may default on its foreign payment obligations, particularly if it fails to resume talks with the International Monetary Fund (IMF), which it has been attempting to do since February.
Internationally, the US dollar fell broadly on Wednesday as US President Joe Biden and top lawmakers failed to break the gridlock on the debt ceiling crisis, while currency movements were minor ahead of US inflation data later in the day.
Following meetings on Tuesday, Biden and House Speaker Kevin McCarthy remained opposed to raising the $31.4 trillion US debt limit, with only weeks until the country faces an unprecedented default.
The US dollar index was last 0.07% weaker against a basket of currencies, at 101.55.
Oil prices, a crucial currency indicator, fell on Wednesday, halting a three-day surge, as an unexpected rise in US oil stocks stoked demand concerns, while investors awaited US inflation data to forecast the next rate decision in the world’s largest oil consumer.