Rupee takes a hit, falls to record low of 299

KARACHI: The rupee suffered a major blow as political instability in Pakistan grew with the arrest of Pakistan Tehreek-e-Insaf Chairman Imran Khan and the ensuing countrywide violent protests by the PTI activists and supporters.

The rupee slid to a record low of 299 against the US dollar, falling by Rs8.78. The dollar was trading at Rs299 in the interbank market by almost midday Thursday.

The rupee depreciation has piled up foreign debt without taking new external loans, making imports further expensive for Pakistan, which faced a six-decade high inflation of 36.4 percent last month.

The dollar demand supply gap has also widened as the exporters have stopped selling US currency on speculations that rupee would depreciated further versus the greenback. On the other hand, importers are seen rushing to buy dollars.

This gap in the demand and supply of the foreign currency in the interbank market have contributed to the rupee’s devaluation.