Dollar hits new high against Pakistani rupee

The Pakistani rupee took another blow on Wednesday hitting another record low against the US dollar in the interbank market, despite policymakers taking fresh measures to try to put a floor under the sliding currency.

The greenback jumped to a record high of Rs177.43, after increasing 64 paisas in value, according to the data shared by the State Bank of Pakistan. The rupee depreciated by 0.36%.

Interbank closing #ExchangeRate for today:https://t.co/LKUzC8eJ1s pic.twitter.com/fEVbP8Wgbz

— SBP (@StateBank_Pak) December 8, 2021

Exchange Companies Association Secretary Zafar Paracha said that it was being expected that Pakistani currency will recover after getting the $3 billion loan package from Saudi Arabia.

“The market was expecting a decrease of at least Rs3 to Rs4 on Monday but it dopped by 9 paisas in the interbank market and Re1 in the open market.”

According to Paracha, the rising trade deficit of the country has been putting immense pressure on the currency.

Pakistan’s imports data has revealed that in the first five months of the current fiscal year the trade deficit ballooned to $20.74b – the highest trade deficit recorded in a single month.

Zafar Paracha added that the reason behind the upward trend in the open market is the constant increase in the interbank. “We have spoken to banks regarding the situation and they are pegging the rise in the dollar value due to the increasing imports,” he said.

However, the banks have not been explaining which sector recorded an increase in imports. The oil import bill has declined by at least 10% though.

“Imports in the automobile sector in Pakistan have been up since the factories assembling imported vehicles locally,” he said.

On the other hand, in the open market, the dollar increased by 80 paisas and reached the peak of Rs179.

Here are the open market rates of major currencies on December 8, 2021:

The local currency has been continuously falling in both, interbank and open markets. It slumped to a new low for the fourth time in just six days.

Zafar Paracha has said the fluctuation in the value of the local currency is due to the rumors in the market.

The experts have said currently the Pakistani rupee is undervalued against the US dollar just because of these speculations. “It has to be somewhere around Rs165,” they claimed.

Earlier, ministers and other government officials including Shaukat Tarin had said that the Saudi deposit will not only improve foreign exchange reserves but also ease the pressure on the rupee.

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