Pakistani rupee continued struggling against the US dollar and hit an all-time low of Rs168.94 in the interbank market on Tuesday.
According to the State Bank of Pakistan, the rupee shed 84 paisa (-0.50 percent) against the greenback in the interbank. The US dollar opened at Rs168.10 and closed at Rs168.94. Within the open market, the rupee was traded at Rs169.20/169.90 per dollar.
Overall, Pakistani rupee shed Rs0.92 in the last two days and Rs1.11 last week against the US dollar, while depreciation during the fiscal year 2021-22 has been Rs11.50. The local unit has shed Rs8.67 against the US dollar in the current year 2021. The local currency has maintained a downtrend after it touched 22-month high of Rs152.27 in May 2021, losing a cumulative 10.92 percent (or Rs16.63) in the past four months to date.
The currency experts said that the dollar’s demand remained high due to external payment, which resulted in increased dollar’s demand. The prices of oil and food items are soaring in the world markets. In addition to this, businesses are set to make hefty import of plant and machinery to set up new factories and expand the existing production lines under the central bank’s initiative Temporary Economic Refinance Facility (TERF), they said.
They said the rupee is under immense pressure due to unfavourable macro-economic data and Afghanistan’s situation. They said that the rising deficit in the current account is also a major concern for the market. They said that dollar outflow to Afghanistan was also a big concern for rupee stability.
They were, however, optimistic that there is no space left for rupee to maintain the downturn, saying if it drops any further, the decline would be unsustainable and short-lived. They opined that the rupee might consolidate at around the current level in the short-run and trade between Rs165-168 over the next six months.
