KARACHI: US dollar reaches to its historical high as Pakistan rupee for the first time in its history crossed the Rs300 mark in exchange rate against greenback during early trading on Thursday, as the local currency continues going south amid market pressure and the conditions set by the International Monetary Fund (IMF).
As the interbank trading opened for the day, the rupee again came under pressure and dipped to the Rs300.25 level against the greenback at around 10:30am.
It means the rupee has depreciated by Rs0.61, or 61 paisa, so far during the session against the previous day’s closing value of Rs299.64.
Earlier on Tuesday, the rupee had depreciated to Rs299.01 in interbank trading, thus setting a new record.
Read more: Pakistan rupee slumps to a record low against US dollar
Previously, it was earlier this year on May 11 when the dollar had fetched Rs298.93 in official exchange rate.
The unchecked fall being witnessed the rupee is a product of the IMF condition which bars the government from any intervention with the market to determine the exchange rate.
It is mandatory for Pakistan, under the $300 billion IMF agreement, to keep the difference between interbank and open market dollar exchange rates not more than 1.25 per cent.
So the slide in open market based upon demand is dragging the rupee down the slope as warned by those advocating a strong currency.
However, the negative effects of the IMF policies are not only responsible for devastating far-reaching consequences but have also started producing opposite results.
The record-high inflation and interest rate as well as energy prices are taking its toll on the national economy in the shape of less electricity demand [just like petrol and diesel], as the Power Division has backtracked from its initial request to raise electricity tariff by Rs5.40 per unit and suggested a smaller raise of Rs3.55 in terms of quarterly tariff adjustment (QTA).
In this scenario, it is not surprising that there are voices at the global stage to challenge the Bretton Wood Institutions – IMF and World Bank. Brazilian President Luiz Inacio Lula da Silva is perhaps most prominent of them, who on Tuesday criticised the IMF loans as “suffocating” and hinted at the possibility of the BRICS bank increasing lending to other countries with “different criteria” to stimulate their economies.
Read more: US dollar maintains historic high rate, keeps up pressure on rupee
