Pakistan's economic downturn continued unabated on Friday, with the rupee hitting an all-time low of Rs 84.50 to the dollar as the country's foreign exchange reserves fell to a six-year low.
The rupee, which has been in virtual free fall over the past few days, recovered slightly to close at Rs 83.20 to the dollar in the inter-bank market after State Bank of Pakistan intervened by selling about USD 40 million in the foreign exchange market.
Experts have attributed the fall of the rupee's value to speculation as well as a high demand for dollars from importers and general consumers.
The country's forex reserves have also fallen to a six-year low of less than eight billion dollars. A senior official of the finance ministry was quoted by The News daily as saying that, on Thursday, foreign exchange reserves touched a record low of USD 2.48 billion in real terms, or barely enough to cater to imports for one-and-half months. However, the State Bank issued a press release the same night to say Pakistan had reserves of $ 7.74 billion as of October 11.
Experts said Pakistan's foreign exchange reserves had fallen sharply due to higher oil payments and the sale of dollars by the State Bank in the currency market to stem the free fall of the rupee. The finance ministry official was also quoted by The News as saying that Pakistan's "national debt has increased alarmingly by Rs 900 billion."
Pakistan's government has been engaged in hectic consultations with global financial institutions like the World Bank for assistance to overcome its economic crisis but there are no signs of such aid coming through in the near future, observers said.
Pakistan has been unable to finalise a facility with Saudi Arabia for receiving oil supplies against deferred payments. It has only received $ 500 million as aid from the Asian Development Bank.
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