The rupee continued to lose ground against the dollar on Monday, hitting a new low of Rs229.88 in the interbank market.

According to the Forex Association of Pakistan (FAP), the rupee lost Rs3.63 against Friday's close of Rs228.37 to reach Rs232 around 1:30pm.

The dollar eventually closed at Rs229.99, with the local currency depreciating 0.66pc, according to data shared by the State Bank of Pakistan (SBP).

Mettis Global Director Saad Bin Naseer said that the rupee remained under pressure due to "political uncertainty" surrounding the run-off Punjab chief minister election.

"Meanwhile, on the demand front, importers have fast tracked opening of their letters of credit in view of the rupee’s fall," he said, adding that exporters were also parking their funds abroad to maximise their returns.

"The government, in collaboration with the State Bank of Pakistan (SBP), should issue guidelines to ensure exporters convert their dollar earnings to rupees immediately after receiving payments," he told Dawn.com.

Delays by exporters in an effort to maximise their rupee earnings has wreaked havoc on the exchange rate causing a significant shortage of the greenback in the market, he said.

'No practical measures'

In his analysis, Exchange Companies Association of Pakistan General Secretary Zafar Paracha said he was expecting the local currency to continue losing ground as "no practical measures are being taken to stop the dollar's flight".

While he agreed with Naseer that developments on the political front were contributing to the rupee's decline, he maintained that these events had a marginal role in the dismal state of the exchange rate.

He pointed out that banks were trading the dollar in the interbank market with a "big difference" between buying and selling rates.

Read: Is the rupee too weak to recover?

"This has raised concerns, while any practical measures by the government to stop them are not being seen," he said, adding that eventually, the common man would bear the consequences.

"It is beyond comprehension why the government is not stopping them [...] Be it the government, political parties or banks, it seems all of them are on a honeymoon."

Paracha urged political parties and other stakeholders to sit together and devise a plan for saving the country's economy.

Rupee's fall

Between April 7 (when the then-prime minister Imran Khan was ousted from power) and July 22, the rupee lost 21.3pc value against the US dollar both due to yawning trade deficit and the growing political instability and uncertainty.

The rupee had appreciated to Rs204.56 in the first week of July after touching 211.93 on June 22. It then kept losing its value against the dollar but registered a minor appreciation when the country reached its staff-level agreement with the IMF on July 15.

It has continued to fall in every session since then.

Last week, the rupee lost 8.25 per cent of its value against the US dollar within a week: it closed to an all-time low of 228.36 per dollar on July 22 from 210.95 per dollar on July 15.

For its part, the SBP attributed the rupee's fall to the “market-determined exchange rate system” under which the current account position, news stories and domestic uncertainty contribute to the daily currency fluctuations.

In an apparent attempt to downplay the depreciation, the SBP said on July 20 that a “better measure” of the rupee’s strength was the real effective exchange rate, which takes into account the currencies in which Pakistan trades in inflation-adjusted terms.