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Uncertainty over the resumption of the International Monetary Fund’s bailout program for Pakistan and rising political temperatures following the arrest of former Prime Minister Imran Khan pushed the rupee to a record low on Thursday, falling below 300 against the dollar in the open market.
The South Asian currency fell below 80 against the UAE dirham on Thursday.
Following Khan’s arrest, protests erupted across the country, causing casualties in various cities. The Islamabad government has called in the country’s military to quell the protests. Eight people have so far been killed in protests between public and security agencies.
While Islamabad and the IMF have been negotiating for a considerable period of time over a loan of more than $1 billion, no agreement has been reached until now.
Earlier this week, Moody’s Investors Service warned that Pakistan could default without an IMF bailout.
“We believe that Pakistan will cover its external payments for the remainder of the fiscal year ending in June. However, Pakistan’s financing options beyond June are highly uncertain. Without the IMF’s plan, Pakistan could default because of its very weak reserves,” Bloomberg quoted Grace Lim, a sovereign analyst at Singapore-based ratings firm, as saying.
Pakistan’s foreign exchange reserves stood at $4.46 billion in the last week of April.
The rupee traded at 80.87 against the UAE (297 against the dollar) on Thursday afternoon, xe.com reported.
But in Pakistan’s open market, the rupee traded over 301 against the dollar and over 81 against the UAE dirham. In the Pakistan interbank market, the rupee fell to Rs 290 against the US dollar.
In the UAE, the rupee to dirham exchange rate is close to 79 when sending money.
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