PAK Rupee depreciates 84 paisas to settle at Rs175.27 against US dollar

LAHORE (NUT-BUSINESS)

The Pakistani rupee on Tuesday depreciated to Rs175.27 against the US dollar — “the lowest level since August 1947,” according to one analyst — owing to an increase in demand for the foreign currency in the inter-bank market.

The currency lost 84 paisas or 0.48% to hit its lowest level of Rs175.27 against the greenback.

The rupee has maintained the downtrend for the past five months. It has lost 15.10% (or Rs23) to date, compared to the 22-month high of Rs152.27 recorded in May.

With a fresh decline of 0.48%, the rupee has depreciated 11.25% (or Rs17.73) since the start of the current fiscal year on July 1, 2021, data released by the central bank revealed. It is pertinent to mention here that the State Bank of Pakistan had adopted a flexible market-based exchange rate regime in 2019.

“The rupee is expected to remain under pressure if talks between the International Monetary Fund (IMF) and Pakistan remain inconclusive,” currency traders forecast, as they believe the massive depreciation of the rupee against the dollar was also caused by panic buying and forward booking by importers because of fears of a possible failure of IMF-Pakistan talks.

Traders also held higher imports coupled with rising commodity prices in the international markets responsible for the strengthening of the dollar against the rupee.

However, apart from the dollar demand by the importers, the panic selling and forward booking of the dollar is also contributing to the rupee depreciation against the greenback. The international crude oil prices are hovering above $85/barrel, which has been making imports of petroleum products for domestic needs pricier.

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