Rupee’s downward spiral continues

The downward journey of rupee continued with the start of a new week, as it further dropped to Rs229.88 against the US dollar in the interbank market.

According to the State Bank of Pakistan (SBP), the rupee, against its closing value of last week’s Rs228.37, had dropped to Rs230 against the US dollar in the early few hours of the new week.

The rupee finally closed at Rs229.88 in the interbank market.

The continuous downward flight of rupee has raised concerns that the country’s economy was shuttering down. The rupee fell down by nearly 8 percent against the dollar during the last week. According to the data of SBP, the reserves have remained below $10 billion while the inflation is also the highest of a decade.

Acting Governor of State Bank of Pakistan has said that the response of markets was unfairly broad-brush in response to the shocks. He said that the market was not paying attention to the relative strengths of the country.

Capital market experts have claimed that the rising political uncertainty has been the main cause of the depreciation in rupee. Experts have also said that the balance of payments pressures on rupee have not eased either.

During the last week, the rupee slipped down from Rs215.2 to Rs228.37. However, the depreciating trend of rupee has continued with the start of this new week as well.