The rupee’s losses continued on Thursday as the local currency closed at a record low of Rs239.94 against the dollar in the interbank market.
According to the Forex Association of Pakistan (FAP), the rupee lost 4.48, or 1.89 per cent, compared to the Wednesday’s close of 236.02 by 12:03pm. Consequently, the rupee was trading at 240.5 against the greenback.
The rupee closed at 239.94, down 3.92, or 1.63pc, according to the State Bank of Pakistan (SBP). Exchange Companies Association of Pakistan General Secretary Zafar Paracha laid the blame squarely on the country’s political situation and the government’s lack of action.
“The country’s political situation is bad but the government and political parties appear to be unconcerned. They are only concerned with saving their government,” he rued. Paracha pointed out that ratings agencies had downgraded Pakistan’s outlook while the tranche expected to be released by the International Monetary Fund (IMF) had reportedly been delayed. In addition, there was uncertainty about whether the Fund’s executive board would demand more actions prior to the tranche’s release.
The real reason for the rupee’s decline was that “we are not doing what we are supposed to do and not taking any practical steps”, he said. In order to stop the rupee’s free-fall, the government should incentivise exchange companies and overseas Pakistanis, link imports to exports, and reduce its expenditures, he opined. “The public is playing its role and paying taxes but those responsible do not seem to be doing anything,” Paracha added.
Meanwhile, the National Electric Power Regulatory Authority on Thursday reserved its decision on a proposed power tariff hike for the consumers of all DISCOs and K-Electric under the head of fuel charges adjustment (FCA) for June 2022. According to reports, NEPRA conducted two separate hearings on the FCA for June 2022 for the K-Electric and the power distribution companies (DISCOs). The Central Power Purchasing Agency (CPPA) on behalf of power distribution companies (DISCOs) had sought an increase of Rs9.91 per unit, while K-Electric (KE) had requested it to jack up the power tariff by Rs11.39/unit on account of FCA of June 2022.
NEPRA will issue its detailed judgement later on the two separate applications after necessary scrutiny of data.
Also, the prices of petroleum products are likely to go up as the Economic Coordination Committee (ECC) on Thursday approved an increase in sales and distribution margins of oil marketing companies (OMCs) and petroleum dealers, sources said.
A well-placed source in the finance ministry said that the ECC meeting presided over by Finance Minister Miftah Ismail accepted the demands of OMCs by raising their sales margin by Rs7 per litre. The OMCs and petroleum dealers have been seeking an increase in their sales and distribution margins by around 6 per cent to the premise of increase in the costs of doing business and inflation. The increase in dealer’s margin will come into effect from August, 1 after approval from federal cabinet, they said.
