Pakistani rupee hits all-time low, falls below 46 vs UAE dirham
Dubai - The decline in remittances is also putting pressure on the Asian currency.
The Pakistani rupee sank to an all-time low on Tuesday morning, crossing 46 against the UAE dirham for the first time.
Bloomberg data showed that the rupee hit all-time low of 168.91 against the US dollar (46.02 versus the dirham) in the inter-bank trading despite $3 billion fresh loans received from foreign financial institutions in the past one week. However, the South Asian currency recovered later and closed at 168.05 against the dollar (45.75 versus the dirham).
The rupee fell on Monday after the terrorist attack on Pakistan Stock Exchange. It's previous all-time low of 45.82 against the dirham was recorded on March 29, 2020.
Analysts said low supply of dollars in the local market and high payment of loans by the government is keeping the rupee under pressure against the greenback. Moreover, the dollar demand is also growing as companies are trying to close their books at the closure of financial year. They expect rupee to regain some ground in early July once the fiscal year 2019-20 ended on June 30.
Samiullah Tariq, head of Research and Development at Pakistan Kuwait Investment Company, on Monday said rupee can reach 46.32 against the dirham (170 versus the US dollar) by December 2020. In addition, the foreign remittances flow from overseas Pakistanis is also on the decline, which is putting pressure on the rupee. Thousands of Pakistani workers have been laid off in the UAE and other Gulf countries since the outbreak of coronavirus.
Pakistan gets $1.3 billion China loan
Meanwhile, Pakistan on Tuesday received $1.3 billion loan from China, said State Bank of Pakistan, the country's central bank.
The loan was disbursed by the Chinese banks this week, taking the total amount of official inflows to $3 billion since June 23, the State Bank said.
On June 24, Pakistan received $1 billion loan - $500 million each from World Bank and Asian Development Bank to help the county fight against coronavirus and improve country's foreign exchange reserves.
The apex bank had said that the loan will help expand health sector capabilities, create jobs and stimulate country's economic growth.