Rupee dropped to an all-time low of 299.01 against the US dollar on Tuesday, depreciating by 0.63% in the interbank market owing to an increase in demand for the greenback due to ease in import restrictions.
The local currency fell by 1.88 against the greenback and closed at 299.01 at the end of the day’s trading, according to the State Bank of Pakistan (SBP).
Its previous record low was 298.93, which was hit on May 11.
On Monday, the rupee ended at 297.13 against the dollar as compared to Friday’s close of Rs295.78.
Head of research at Arif Habib Tahir Abbas said he expected the rupee to trade between 295 and 305 to the dollar for the time being.
“The declining trend is mainly attributable to the ease off in the import restrictions coupled with clearance of backlog for goods and services,” he said.
He added that multinational corporations were able to repatriate some profits, furthering rupee outflows.
Commenting on the development, AA Commodities Director Adnan Agar told Geo.tv that the rupee depreciation is mostly due to political reasons as there are fears of a delay in the general elections, consequently delaying the fulfilment of commitments from the International Monetary Fund (IMF) and other global lenders.
“When the political uncertainty continues, with a caretaker setup in power, questions like who will invest and lend the money to the country arise,” he said.
Agar added that this is the reason for the rupee’s losses and it will remain the same until or unless there is clarity on the political situation.