Intraday update: Pakistani rupee drops to Rs268.30, losing more than Rs12 versus US dollar

Pakistani rupee (PKR) continued its downward trend on Friday, with the rupee declining over Rs12 versus the US dollar in the interbank market. The local currency was trading at Rs268.30, compared to yesterday’s close of Rs255.43 in the interbank market.

The dollar has gained Rs30.41 in the interbank market since Thursday as exchange companies removed the dollar cap, a key demand of the IMF as part of a bailout programme agreed upon in 2018.

PKR fell to Rs265 against the US dollar in the open market, a decline of Rs3 compared to the day before.

The removal of the cap on the dollar rate took the currency market by surprise and resulted in extreme volatility. Experts termed it a “much-awaited adjustment” and predicted that it would help in increasing export proceeds and inward remittances through legal banking channels.

The difference in rates between the interbank and open markets owing to the price cap removal, which had widened to Rs15 in recent months, was almost wiped out.

The country’s foreign exchange reserves have depleted to a critical level, falling to $3.678 billion in the week ending January 20. This is not enough to finance even three weeks of imports.

This is a developing story and will be updated after interbank closing.