Rupee losing streak continues

 On Friday, the rupee continued to depreciate for the second straight day, reaching a new low of Rs 262.60 to the dollar, a loss of 2.73% or Rs 7.17. This drop in the rupee was a result of the government ending its control over its price in order to revitalize the International Monetary Fund (IMF) loan program. Over the past two days, the rupee has fallen 12% or Rs 31.71 compared to its close on Wednesday, according to the State Bank of Pakistan. Also, foreign exchange reserves decreased to $3.7 billion. The government's decision to let market forces, primarily commercial banks, determine the rupee-dollar exchange rate is a condition from the IMF. Pakistan is trying to restart the stalled $6.5 billion IMF program to avoid a potential default on international payments and raise $3 to 4 billion from multilateral and bilateral creditors. The devaluation of the rupee is expected to improve foreign exchange reserves by increasing the flow of remittances and exports through official channels. However, inflation is projected to rise to 31% in the coming months and negatively affect economic growth.