The Pakistani rupee sank to an all-time low against the dollar Friday on high oil prices and forex reserve fears as the country prepared to repay nearly $400 million to the International Monetary Fund.
The rupee fell to 94.75 to the greenback in trading in Karachi on Friday, down from 94.70 on Thursday, and has now lost 33 percent of its value against the US currency since March 2008.
“The increase in the international oil price... has affected Pakistan’s foreign exchange reserves and they could suffer further with the repayment of IMF’s installment due today,” said analyst Mohammad Sohail of Topline Securities.
“These factors have contributed to the panic in the currency market.”
In Asian oil markets on Friday, Brent North Sea crude for October delivery stood at $114.54 a barrel, while New York’s main contract, light sweet crude for delivery in October was at $95.68.
An official in the Ministry of Finance said Pakistan was set to pay $397 million to the IMF on Friday and hoped it would have a “minimal effect” on the forex reserves, which stand at $15.18 billion, according to the central bank.
The official said Pakistan has already repaid $901.4 million to the IMF in three instalments.
The Washington-based fund bailed out Pakistan with an $11.3 billion loan package launched in November 2008 as the country faced 30-year-high inflation rates and fast-depleting reserves, as well as a deadly insurgency.
Sohail said the panic in the currency market may continue next week, if the international oil and commodity prices do not stabilize to a comfortable level.