Pakistani rupee hits fresh all-time low on political uncertainty

The Pakistani rupee remained under pressure against the US dollar, the UAE dirham and other major currencies and hit fresh all-time low on political uncertainty and rising demand of the greenback from the importers.

The South Asian nation currency, the second worst performer this year in Asia after Sri Lanka, shed another 0.66 per cent to the US dollar and closed at 229.88 (62.63 versus the dirham) in the interbank market on Monday, according to data shared by the State Bank of Pakistan.

The rupee lost Rs3.63 against Friday’s close of 228.37 against the US dollar (62.22 against the dirham) to reach at 232 (63.21 versus the dirham) during the intra-day trading but recovered some grounds in the final session of the day.

In the open market, the rupee was changing hands at 235 to a dollar (64.03 against the dirham) as importers were keen to buy the greenback to clear their payments. The rupee lost 30.2 per cent of its value against the US dollar this year, second only after the Sri Lankan rupee loosing 78.6 per cent.

Samiullah Tariq, head of research at Pakistan Kuwait Investment Company, said the rupee will remain under pressure until the political uncertainty is over.

“I think the rupee depreciated as payments became due for higher energy imports on previous months, delay in arrival of planned inflows, increase political uncertainty, and change in rating outlook by rating agency,” Tariq told Khaleej Times on Monday.

“I think once there’s a clarity on political front and certainty regarding arrival of inflows, the Pak rupee exchange rate against the US dollar should improve,” he said.

Zafar Paracha, general secretary of Exchange Companies Association of Pakistan, the rupee will continue losing ground as no practical measures are being taken by the government and the central bank to stop the dollar's flight.

“Banks are trading the dollar in the interbank market with a big difference between buying and selling rates. This has raised concerns, but the government is doing nothing to contain this practice," he said.

— muzaffarrizvi@khaleejtimes.com