The Pakistani rupee plunged by another Rs2.55 on Tuesday to a record low of Rs212.51 against the US dollar in the inter-bank market at around 11 am on Tuesday.
The rupee has crossed the threshold of 212 for the first time despite Finance Minister Miftah Ismail’s assurance on Monday that the International Monetary Fund (IMF) programme would resume "in a day or two".
The rupee closed at Rs209.96 against the greenback on Monday.
"Traders have indulged into panic buying dollars…amid prolonged delay in the revival of the IMF programme and fast depletion in foreign exchange reserves," Alpha Beta Core (ABC) CEO Khurram Schehzad said in a conversation with The Express Tribune.
The reserves slipped below $9 billion, indicating a deteriorating balance of payment crisis.
Other experts said that there is a crisis of confidence and that traders have lost confidence in the rupee after conflicting reports regarding the currency's future value.
Commercial banks – the inter-bank players – speculated and are anticipating a significant drop in the value of the rupee in the near future. Some currency dealers are linking the anticipated drop in the value of the rupee with the IMF conditions.
Experts said that the rupee had already weakened far beyond its fair value of around Rs190 in recent days.
Read Rupee remains volatile as USD crosses 211
The domestic currency would most likely recover once Pakistan and the IMF reach a staff-level agreement for the revival of the $6 billion loan programme.
Earlier, Finance Minister Miftah Ismail sought US help to revive the programme, reports suggest that the US has assured its support.
Finance Minister Miftah Ismail hoped to seal a deal with the IMF for the revival of the $6 billion bailout package in a day or so after the government considered increasing the tax target to around Rs7.45 trillion and adjusted some expenses.
The finance minister told The Express Tribune on Monday that the fiscal framework with the IMF had almost been finalised.
“God willing, the IMF deal will be finalised in a day or so,” he said while responding to a question.
“The understanding on the fiscal framework should give a positive signal to the markets and we should also expect a positive statement from the IMF in couple of days,” the minister said after attending a meeting of the Senate Standing Committee on Finance.
The minister told The Express Tribune that the monetary targets would now be agreed with the IMF by the central bank, which would eventually pave the way for reaching an understanding on the Memorandum for Economic and Financial Policies (MEFP).