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Pakistan rupee hits fresh all-time low against US dollar
Foreign exchange reserves decrease to $15.7 billion in the week ended June 2
In the intraday trading, the local unit made a historical drop of Rs4 in a single day and surpassed Rs204 threshold against the greenback (55.58 against the dirham), however it recovered some ground in the final session. — File photo
The Pakistan rupee remained on slippery path for third consecutive day and dropped to historic lows on Tuesday by shedding another 1.37 per cent of its value against the US dollar due to rising demand of the greenback in both the interbank and open markets.
The South Asian currency hit fresh all-time low against the US dollar and shed Rs2.77 to close at Rs202.83 (55.26 against the dirham) in the interbank market, surpassing its previous record low of Rs202 (55.04 versus the dirham) recorded on May 26.
In the intraday trading, the local unit made a historical drop of Rs4 in a single day and surpassed Rs204 threshold against the greenback (55.58 against the dirham), however it recovered some ground in the final session.
In the open market, the rupee closed at a historic low of 204 against the greenback, according to Forex Association of Pakistan. The currency lost 30.65 per cent of its value during the ongoing financial year 2021-22, ending on June 30.
“The local currency remained under pressure throughout the day as importers bought the dollars to pay their import bills. Oil payments also created pressure on the rupee,” according to a forex dealer.
Another currency analyst said the rupee is expected to lose further ground against the major currencies unless the government secures funding deals with the International Monetary Fund (IMF) or other multinational lenders and friendly nations.
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The rupee also faced pressure after foreign currency inflows from overseas Pakistanis through their Roshan Digital Account (RDA) dived to a 15-month low at $189 million in last month. The inflows through RDAs, which stood at a strong $290 million in March, continued to drop for the second consecutive month in May.
“Overseas Pakistanis have so far deposited over $4 billion through RDA in the past 21-months, but there is a slow growth in inflows since the present government took charge in April,” according to an analyst.
Meanwhile, Pakistan’s foreign exchange reserves decreased by $366 million to $15.7 billion in the week ended June 2. The State Bank of Pakistan’s reserves dropped to $9.72 billion, according to the central bank data.
Financial expert Asad Rizvi said that credit rating agency Moody’s had last week downgraded Pakistan’s outlook from stable to negative due to external financing factors, to which the market reacted and the rupee dipped.
— muzaffarrizvi@khaleejtimes.com
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