Pak rupee drops to new low owing to withdrawal of restrictions on imports

Pakistan imposed import restrictions beginning in June 2022 to stem outflows from its shrinking foreign reserves. The withdrawal of those restrictions was a condition of a three billion USD International Monetary Fund (IMF) loan programme to aid the crisis-ridden economy.

Pakistan’s rupee plunged to a record low on the interbank market on Tuesday, August 22  following the decision to ease in import restrictions that has lifted demand for the dollar, central bank data showed.

Pakistan imposed import restrictions beginning in June 2022 to stem outflows from its shrinking foreign reserves. The withdrawal of those restrictions was a condition of a three billion USD International Monetary Fund (IMF) loan programme to aid the crisis-ridden economy.

According to traders, the rupee dropped 0.6 percent to a day low of 299 against the dollar. The previous record was set on May 11, 2023 at 298.93 Pakistan rupees. That came two days after Imran Khan, a former prime minister, was detained on allegations of land graft, escalating the political unrest in the nation.

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Head of research at Karachi-based trading firm Arif Habib, Tahir Abbas stated the rupee is now forecast to trade between 295 and 305 to the dollar.

“The declining trend is mainly attributable to the ease off in the import restrictions coupled with clearance of backlog for goods and services,” he said as per Reuters reports.

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