KARACHI: The Pakistani rupee continued to lose ground and fell to Rs171.63 against the US dollar in the inter-bank market on Tuesday following a fresh depreciation of Rs1.12 (or 0.65%).
The local currency closed at Rs170.51 against the US dollar in the inter-bank on Monday.
Analysts see the outlook for the rupee weaker in the near term as there is uncertainty regarding the International Monetary Fund (IMF) programme.
Last week, Adviser to Prime Minister on Finance and Revenue Shaukat Tarin had said the IMF programme will be positively concluded by the end of the week; however, no development in this regard has been observed.
Speaking to Geo.tv, Arif Habib Limited’s (AHL) Head of Research Tahir Abbas said that the government needs to take immediate action because the uncertainty has started prevailing in the market.
“Whenever there is uncertainty in the market significant fluctuations are observed in the local currency,” the analyst said.
Abbas added that depreciation in rupee also creates inflationary pressure which is bad for the economy as surging inflation means that the import bill will widen increasing the demand for dollar.
“As soon as clarity regarding IMF is received the marker will reverse its trend,” he predicted.