Dollar hits all time high against Pakistani rupee

KARACHI, Pakistan (AA) – The US dollar hit an all-time high against Pakistani rupee on Wednesday, rising past 200 in the open market.

The greenback that began its streak against the Pakistani rupee last month — amid a political crisis, which also saw the ouster of former premier Imran Khan through a no-trust motion — traded at Rs 200.5 in the open market.

In the interbank market, the US currency traded at 197.60 rupees after gaining 1.10 against the previous day’s close of 196.50 rupees.

Since April 11, the greenback has gained over 14 rupees, raising fears of inflation.

Economists cite the country’s depleting foreign reserves, rising imports, and the government’s “reluctance” to take decisions on some International Monetary Fund (IMF) conditions as key factors behind the greenback’s upward march.

The IMF that announced a $6 billion bailout package to prop up the South Asian nation’s sputtering economy in 2019 demands withdrawal of subsidies on several items, mainly petroleum and electricity.

Pakistan is seeking the release of $1 billion tranche of the bailout package.

Sensing his ouster, former premier Khan in March had subsidized petroleum prices until the new budget in contravention of his government’s commitment to the IMF.

This has forced the newly-elected Prime Minister Shehbaz Sharif to retain the petroleum prices in order to avoid a public backlash, despite rising prices on the international markets.

Economists warn that if the government does not take an immediate decision to raise the petroleum prices, the country’s already tottering economy will take a further nosedive.