The closing is a slight recovery from where the rupee was quoted during intra-day trading when it hit 232 against the dollar.

As per the State Bank of Pakistan (SBP), the rupee settled at 229.88, a depreciation of 0.66% or Rs1.51. This is now the lowest closing level for the rupee in history.

During the previous week, the rupee lost 7.6% to the US dollar, more than what businesses tend to keep in mind over the course of a year in terms of annual currency depreciation, as renewed political uncertainty and heightened concerns over Pakistan’s external financing needs saw the inter-bank market go through a tumultuous five sessions.

The currency endured its worst week in over two decades, hitting fresh lows in each and every session to eventually end at 228.37 against the US dollar.

Multiple people Business Recorder reached out to during the week said letters of credit were being opened at rates much higher than the one prevailing in the inter-bank market as well.

On Monday, it was reported that the SBP is also discouraging trading in the inter-bank market, asking commercial lenders to manage import-payment requests from their own inflows, such as exporter accruals and remittances.

If the bank still needs to borrow, it must seek permission from the monetary authority.

The SBP did not reply to a query from Business Recorder on the matter.

The rupee has been under pressure for months as falling foreign exchange reserves and a widening current account deficit were reflected in the currency’s downward slide.

However, during the previous week, political uncertainty was renewed after the Punjab by-polls, where Pakistan Tehreek-e-Insaf (PTI) registered a win against Pakistan Muslim League-Nawaz (PML-N), raising concerns over continuity in economic reforms promised by the coalition government to the International Monetary Fund (IMF).