Pakistani rupee dives to 228 per US dollar
Jul 22, 2022
Islamabad [Pakistan], July 22 : The Pakistani rupee on Friday surpassed all prior records against the US dollar after hitting a fresh record low of PKR 228 against the dollar in the interbank market.
The Pakistani rupee witnessed a PKR 1.56 or 0.68 per cent decline at the opening of the inter-bank market, Geo News reported.
The data released by the State Bank of Pakistan (SBP) showed that the rupee fell to as low as 229 during the intraday trade, but it closed at PKR 228.27.
Analysts have said that the political uncertainty in the country due to the by-elections in Punjab and the delay in the International Monetary Fund's (IMF) programme has contributed to the slump of the Pakistani rupee.
"The depreciation this week, amongst other factors, has been triggered by the political surprise that the electorate delivered in Punjab on the weekend, and this frenzy should fizzle out soon," Development economist Maha Rahman said.
"I usually also stress upon long-term planning but at this hour adept fire fighting is extremely critical," Rahman added.
Economist and former adviser to the federal ministry of finance Dr Khaqan Hassan Najeeb said that trade deficit and market influencing news have a lot of impact on currency changes.
The former adviser to the finance ministry said that the political uncertainty and a Fitch ratings downgrade has influenced the free fall of the rupee, local media reported.
"With the pronounced rupee slide, financial institutions tried to cover import payments. It created a higher demand in the interbank," the former adviser said adding that exporters hold their proceeds during depreciation to yield a better rate in the future.
Meanwhile, Arif Habib Limited analyst Ahsan Mehnti is hopeful that the currency will recover soon as the IMF deal with the country will give it a "much-needed breather".
The IMF on Saturday said that Pakistan will receive USD 1.7 billion in tranches in the coming three to six weeks.
Since the beginning of this fiscal year (July 1, 2021) to date, the rupee has collectively dropped over 30.65 per cent (or PKR 48.29) compared to the previous fiscal year's close at PKR 157.54.
The rupee has maintained a downward trend for the last 13 months. It has lost over 33.20 per cent (or PKR 50.56) to date, compared to the record high of PKR 152.27 recorded in May 2021, reported Geo News.
