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Coronavirus impact: Pakistan rupee slides again, sheds 0.5% versus UAE dirham as demand up

Muzaffar Rizvi/Dubai
Filed on June 17, 2020 | Last updated on June 17, 2020 at 09.16 pm
pakistan, dollars, coronavirus, covid19

(File)

Rupee is expected to continue downward trend due to economic slowdown and coronavirus outbreak.

The Pakistan rupee came under pressure and shed another 0.5 per cent of its value against the US dollar on Wednesday as local importers generated demand for the greenback to clear their liabilities in outgoing financial year on June 30.

The rupee declined to 165.65 against the US dollar (45.14 versus the dirham) in open market as local importers purchased more US currency. It was closed 163.05 against the US dollar (44.42 versus the dirham) on Tuesday.

Market insiders and analysts said the rupee is expected to continue downward trend in coming months due to economic slowdown and worsening situation of the coronavirus outbreak in the country.  

"Outlook for the rupee is weak, as global liquidity environment is tough and inflows including exports and remittances remain uncertain," Samiullah Tariq, head of Research and Development, Pakistan Kuwait Investment Company, told Khaleej Times on Wednesday.

"The rupee is expected to sustain downward trend in near future due to scheduled debt repayments, import payments and lower remittance inflows," he said.

The rupee lost 1.6 per cent against the US dollar and the UAE dirham this month so far. It shed 4.8 per cent of its value last month.  

Data from xe.com showed that the rupee plummeted to an all-time low of 45.6 against the UAE dirham or 167.35 versus the US dollar on March 26. 

Wide investment option

Pakistan Business Council Dubai president Iqbal Dawood said depreciation of rupee gives some investment opportunities to overseas Pakistanis and they should consider in real estate, agro-based projects, small-scale manufacturing and value-addition projects for exports.

"We have agro-based economy and it always pay back good returns on investment," he said.

Muzzammil Aslam, CEO of MAFA Macro Consultant, said present environment perfectly suits overseas Pakistanis to invest in the country. 

"They can invest in real estate, health, education, entertainment and technology sectors," Aslam told Khaleej Times.

Tariq of Pakistan Kuwait Investment Company said, overseas Pakistanis should invest in local saving schemes such as National Saving Scheme, Investor Portfolio Securities, mutual funds and equities to get the advantage of rupee depreciation. 

"Expats especially living in GCC should also evaluate investment in housing and real estate as well," he said.

Earlier this month, the State Bank of Pakistan (SBP) issued a report to highlight impact of Covid-19 on Pak economy and foreign exchange reserves of the country that may lead to a decrease in rupee value against the dollar.

muzaffarrizvi@khaleejtimes.com

 

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