A drastic plunge in foreign exchange reserves, ongoing political uncertainty, and high oil prices continued to push Pakistan's rupee to new lows with the currency closing over 184 level against the US dollar for the first time on Friday after a 0.33% fall in the inter-bank market.

As per the State Bank of Pakistan (SBP), the rupee closed at 184.09, its weakest level in history, after a day-on-day depreciation of 61 paisas.

The rupee has lost over 17% since its most-recent high achieved in May last year, while on a fiscal year to date (FYTD) basis, the local currency has depreciated by over 14%.

Oil prices, a major determinant of currency parity, fell on Friday ahead of a meeting of International Energy Agency (IEA) member nations set to discuss a release of emergency oil reserves alongside a huge planned release by the United States. Brent crude futures were down 71 cents, or 0.7%, to $104.00 a barrel. U.S. West Texas Intermediate (WTI) crude futures were down 92 cents, or 0.9%, at $99.36 a barrel.

On Thursday, U.S. President Joe Biden announced a release of 1 million barrels per day for six months, starting in May.

However, despite the decline, experts believe oil prices remain high for a net importer like Pakistan. Sentiments also remain negative as Pakistan's foreign exchange reserves witnessed a significant decline, adding to pressure on the local currency.

The reserves held by the State Bank of Pakistan (SBP) decreased by a massive $2.915 billion, falling to $12.05 billion, revealed data released by the central bank on Thursday.

"This decline reflects repayment of external debt, including repayment of a major syndicated loan facility from China," said the SBP. "The rollover of this syndicated facility is being processed, and is expected shortly."

This massive $3-billion drop in a week has created pressure on the rupee, Umair Naseer at Topline Securities told Business Recorder.

Naseer said that despite China’s commitment, the loans have yet to be rolled over which has raised concerns in the market.

“On the other hand, rising political volatility is also playing on the minds of market players, who are waiting for the International Monetary Fund (IMF) review, which remains delayed,” he said.

“Looking at the present situation, the local currency will remain under pressure and may cross the 185 level,” he said.