KARACHI: Pakistan national currency lost its value by 1.04 percent on Tuesday against United States (US) dollar, currency dealers said, following the departure of finance minister Ishaq Dar from office and amid a surge in demand for import payments. 

The greenback closed at Rs291.51 in the interbank market as compared to Friday’s close of Rs288.49, according to the State Bank of Pakistan and Exchange Companies Association of Pakistan (ECAP). The Pakistani currency also depreciated in the open market, with the dollar rising by Rs4 to Rs300. 

“The departure of Ishaq Dar is also a factor behind the currency depreciation as he was considered a hurdle in the freefall of rupee,” Malik Bostan, the ECAP chairman, told Arab News. 

When Dar assumed charge last year, his arrival was seen as favorable for the rupee. It was followed by a 4.32 percent gain in the value of Pakistani currency in September last year. 

However, the rupee could not continue to strengthen during his stay in office and subsequently lost its value by around 20 percent. 

High demand from Pakistanis going to perform the Umrah pilgrimage is also contributing to pressure on the rupee, according to Bostan. The government has allowed importers to arrange dollars for oil imports on their own, which is also one of the factors behind the rupee’s fall. 

“The importers are arranging dollars from the open market and other sources to make payments for the import of fuel oils that is why the pressure on the rupee is building up,” he said. 

The South Asian nation, under an agreement with the International Monetary Fund (IMF), is bound to keep the exchange rate gap between open and interbank markets not more than 1.5 percent in any five consecutive days, according to Samiullah Tariq, a research director at the Pakistan Kuwait Investment Company. 

However, the gap widened to around 3 percent on Tuesday. 

As Pakistan entered the election phase with the appointment of a caretaker prime minister this week, analysts said the currency market was also jittery as the caretakers would have to make some tough decisions in line with the IMF agreement.  

The stock market remained range-bound and closed up by 141 points at 48,565-level on the back of strong valuation. 

“Pakistan stocks closed higher led by selected scrips across the board on strong valuations though late session pressure was witnessed on falling global crude oil prices and concerns for over Rs2.3 trillion unresolved power sector circular debt issue,” said Ahsan Mehanti, CEO of Arif Habib Corporation brokerage house.