A stronger US dollar and hidden payments pushed the rupiah to a new all-time low in the interbank market on Wednesday, with Pakistan’s currency closing above the 190 level for the first time in history against the greenback.
According to the State Bank of Pakistan (SBP), the rupee closed at 190.02 after a daily decline of Rs1.36 or 0.72%. On Tuesday, the rupiah closed at a record low of 188.66.
The rupee has now lost more than 7% against the US dollar in the current calendar year and more than 17% in the year to date.
Pakistan’s currency has been under pressure as a widening current account deficit, falling foreign exchange reserves and looming debt repayments weigh on the rupee.
Moreover, the lack of clarity on future currency inflows and the absence of a coherent economic policy from the new government further made investors uneasy, deepening the crisis in an economy also in the grip of a crisis. political uncertainty.
The rupee depreciates to an all-time low against the US dollar
Oil prices, a key determinant of currency peg for the net-importing country, also rose more than 2.5% on Wednesday after plunging nearly 10% in the past two sessions, buoyed by concerns over supply as the European Union strives to gain support for Russian oil. and Russian gas flows to Europe through a key transit point in Ukraine have dried up.
Asad Rizvi, former national treasurer of Chase Manhattan Bank, in an interview with a private broadcaster, said the currencies of oil-importing countries including China, Thailand and South Korea had devalued.
“So has the Pakistani rupee,” he said, pointing out that the SBP’s foreign exchange reserves had fallen from over $20 billion in August last year to just over $10 billion. billion in May, adding pressure on the local currency.
Rizvi said the delay in resuming the International Monetary Fund (IMF) program was also concerning. “The IMF may not lend you enough for all your financing needs, but its approval is crucial to pave the way for other creditors.”
Earlier, FPCCI, one of the country’s leading trade bodies, also expressed concern over deteriorating economic indicators, adding that the current level of Pakistan’s current account deficit is unsustainable.
Interbank market rate for the dollar on Wednesday
OFFER Rs 190.40
OFFER Rs 190.60
open market movement
In the open market, the PKR lost 2 rupees long and 2.50 rupees short against the USD, closing at 191 and 192.50 respectively.
Against the euro, the PKR lost 3 rupees on the purchase and sale, closing at 201 and 203 respectively.
Against the UAE dirham, the PKR lost 70 paisa on the purchase and 80 paisa on the sale, closing at 51.50 and 52 respectively.
Against the Saudi Riyal, the PKR lost 60 paisas on the buy and sell side, closing at 50.40 and 50.80 respectively.
Wednesday free market rate for the dollar
OFFER Rs 191
OFFER Rs 192.50