KARACHI: The Pakistani rupee continued to lose ground against the US dollar on Tuesday, falling to Rs171.63 in the interbank market after a new devaluation of Rs1.12 (or 0.65 percent ).
In the interbank market on Monday, the local currency was valued at Rs170.51 versus the US dollar.
The rupee is expected to weaken in the short future, according to analysts, due to uncertainties surrounding the International Monetary Fund (IMF) program.
Shaukat Tarin, the Prime Minister’s Adviser on Finance and Revenue, claimed last week that the IMF program will be completed by the end of the week; however, no progress has been made.
The government has to take urgent action since market uncertainty has begun to reign.
“Whenever there is market uncertainty, big movements in the local currency are witnessed,” the expert stated.
Abbas went on to say that depreciation of the rupee causes inflation, which is negative for the economy since rising inflation implies the import bill would spread, boosting demand for dollars.
“As soon as the IMF situation is clarified, the marker’s trajectory will reverse,” he said.