A stronger US dollar and lurking payments pushed the rupee to a fresh all-time low in the inter-bank market on Wednesday with the Pakistani currency closing over the 190 level for the first time in history against the greenback.

As per the State Bank of Pakistan (SBP), the rupee closed at 190.02 after a day-on-day fall of Rs1.36, or 0.72%. On Tuesday, the rupee had closed at then-record low of 188.66.

The rupee has now lost over 7% against the US dollar in the ongoing calendar year, and over 17% during the fiscal year to date.

Pakistan’s currency has been under pressure as a widening current account deficit, falling foreign exchange reserves, and impending debt payments take a toll on the rupee.

Additionally, lack of clarity on future foreign exchange inflow and absence of a coherent economic policy by the new government have further put at unease investors, deepening a crisis in an economy plagued by political uncertainty as well.

Rupee depreciates to record low against US dollar

Oil prices, a key determinant of currency parity for the net-importing country, also rose over 2.5% on Wednesday after plunging nearly 10% in the last two sessions, buoyed by supply concerns as the European Union works on gaining support for a Russian oil and flows of Russian gas to Europe through a key transit point in Ukraine dried up.

Asad Rizvi, former country treasurer of Chase Manhattan Bank, while talking to a private channel said currencies of oil-importing countries including China, Thailand, South Korea have devalued.

“Similar has been the case with Pak rupee,” he said, pointing out that the SBP’s foreign exchange reserves have declined from over $20 billion in August last year to just over $10 billion in May, adding to the pressure on the local currency.

Rizvi said delay in the resumption of the International Monetary Fund (IMF) programme is also concerning. “The IMF may not lend you enough for all your funding needs, but its approval is crucial to pave way for other creditors.”

Earlier, FPCCI, one of the country’s leading trade bodies, also expressed concern over deteriorating economic indicators, adding that Pakistan’s current level of current account deficit is unsustainable.

Inter-bank market rates for dollar on Wednesday

BID Rs 190.40

OFFER Rs 190.60

Open-market movement

In the open market, the PKR lost 2 rupees for buying and 2.50 rupees for selling against USD, closing at 191 and 192.50, respectively.

Against Euro, the PKR lost 3 rupees for both buying and selling, closing at 201 and 203, respectively.

Against UAE Dirham, the PKR lost 70 paisas for buying and 80 paisas for selling, closing at 51.50 and 52, respectively.

Against Saudi Riyal, the PKR lost 60 paisas for both buying and selling, closing at 50.40 and 50.80, respectively.

Open-market rates for dollar on Wednesday

BID Rs 191

OFFER Rs 192.50