The rupee has weakened to a record low, becoming the worst performing currency since Friday, after the State Bank of Pakistan allowed it to decline amid mounting economic pressure and speculation that the country may need support from the International Monetary Fund (IMF).

The rupee was at 110.10 per dollar in the interbank market on Wednesday morning, forex dealers said. It is being bought at Rs110.50 per dollar and being sold at Rs111.50 per dollar in the open market.

The rupee was Asia?s most stable currency since 2014, until the widening deficits and declining foreign exchange reserves mounted pressure on the central bank to devalue it.

The IMF has indicated in the past it believed the currency was overvalued. This view was confirmed by Senator Saleem Mandviwala, former chairman of the Board of Investment and minister of state for Investment, earlier today.

Speaking to Geo News, Senator Saleem Mandviwala said the government had been intervening to keep the rupee stable over the past few years, which led to its overvaluation.

Dollar rate breaks four-year record, reaches Rs111 in interbank market

The US dollar's previous highest rate was Rs110.50 in September 2015

He said that after Finance Minister Ishaq Dar left for London for medical treatment, the government decided to stop intervening and let the rupee take its course, which has resulted in the current devaluation.

The rupee will stabilise around current levels before sliding gradually to 114 per dollar ahead of general elections next year, Bloomberg quoted Hamad Aslam, research director at Elixir Securities Pakistan Pvt Ltd. in Karachi.