Rupee Breaks Its Own Record Against Dollar Again Despite Good News from the US


The Pakistani Rupee (PKR) fell to another new all-time low against the US Dollar (USD) and depreciated by 10 paisas against the greenback in the interbank market today. It hit an intra-day low of Rs. 178.57 against the USD during today’s open market session.

The PKR depreciated by 0.06 percent against the USD and closed at Rs. 178.15 today after it lost one paisa and closed at 178.05 in the interbank market on Tuesday, 21 December.

The local currency has lost 13.08 percent on a fiscal-year-to-date basis after recording another historic low today besides depreciating by 11.46 percent on a calendar-year-to-date basis.

While the rupee continues to post historic drops against the dollar, an interesting development on the sidelines suggests that Afghanistan may soon receive supportive liquidity from the United States through a channel of licensed UN agencies.

The development was announced at a news conference in Washington DC after a State Department official said that the US would be more flexible on financial restrictions imposed on Afghanistan following the Taliban’s takeover. He stated that the US had backed the delivery of $280 million to Afghanistan from a World Bank fund last week.

It is pertinent to note that the US had contributed $208 million in humanitarian aid to Afghanistan since August, bringing the total to $475 million this year.

These first signs of flexibility in favor of the war-torn country could offer support to Pakistan’s exchange unit as well since its devaluation was a consequence of the Taliban’s takeover of Afghanistan in August 2021.

In light of the PKR’s interbank performance during the trading hours earlier today, the former Treasury Head of Chase Manhattan Bank, Asad Rizvi, remarked in a news column that Pakistan’s approach to addressing currency problems has been unquestionably yielding the desired outcomes so far.

The positive developments include improved efforts made by banks to speed up the procedure and open new branches. Some banks provide new products to non-resident Pakistanis in order to gain consumers. Incentives are often given to banks to recruit new customers, which will help put substantial support behind the local unit in the near term, Rizvi added.

The PKR resumed its declining trend against most of the other major currencies as well. It posted losses of 55 paisas against the Pound Sterling (GBP), 40 paisas against the Canadian Dollar (CAD), and 41 paisas against the Australian Dollar (AUD).

It also posted a losses of over two paisas against both the UAE Dirham (AED) and the Saudi Riyal (SAR) in today’s interbank currency market.

Conversely, the rupee appreciated against the Euro (EUR) and posted gains of 49 paisas in today’s interbank currency market.

Source: Pro Pakistani