Pakistani currency plummeted by a staggering Rs2.02 (or 1.2%) against the US dollar in intra-day trading in the inter-bank market to a record low of Rs173.2 on Monday.

“The uncertainty regarding resumption of the International Monetary Fund (IMF) loan programme mounted pressure on rupee,” Taurus Securities Head of Research Mustafa Mustansir said while taking to The Express Tribune.

The rupee had closed at Rs171.18 on Friday, according to the data from the State Bank of Pakistan (SBP).

The local currency nosedived on conflicting reports pertaining to the ongoing talks between Pakistan and the International Monetary Fund (IMF).

“Although the Ministry of Finance has stated that talks are headed in the positive direction, market rumours point towards roadblocks in positive conclusion of the talks,” he said.

Successful negotiations would allow Pakistan to resume IMF’s $6 billion loan programme which is on hold since June.

This is for the second time Pakistan and IMF are holding talks to resume the programme.

The rupee has maintained its downturn since it hit 22-month high of Rs152.27 in May 2021. The SBP has injected $1.2 billion into the inter-bank market to defend the rupee in the ongoing fiscal year 2021-22 and the leadership has pumped a total of $5.8 billion since it came to power in August 2018.

Earlier, the SBP let the rupee depreciate massively in the inter-bank market after finalisation of an agreement with the International Monetary Fund (IMF) for a loan programme on May 12, 2019.