Rupee Crashes to Its Lowest Ever Against the US Dollar

The Pakistani Rupee slid to an all-time low against the US Dollar (USD) today.

The local currency (PKR) lost 85 paisas against the US Dollar (USD) to close at Rs. 168.94 today.

The securities brokerage firm Arif Habib Limited tweeted that the PKR depreciated by 0.5 percent against the USD to close at an all-time low.

The Rupee has been depreciating steadily over the past weeks amid recent vulnerabilities in the current account, a spike in imports, and political instability in Afghanistan.

Eman Khan, an analyst at market data company Tresmark, remarked, “We expect the central bank to intervene to stabilise the Rupee,” and added that “some verbal intervention has already been seen from the Finance Minister, but some dollar liquidity needs to be provided to manage. This will mitigate the depreciatory pressures from loose monetary, fiscal policy, as well as worsening CAD and counter imported inflation arising from high global oil & commodity prices”.

The Managing Director at Khadim Ali Shah Bukhari Securities, A. A. H. Soomro, said, “The swing is getting too abrupt now for a fragile economy like ours”.

He explained that decisions need to be made strategically, and that letting the PKR fall will not spur export growth, which is something that requires making an effort to diversify exports.

“The PKR is now entering the ‘disorderly’ range,” he warned.

The local currency depreciated against other major currencies today. It lost Rs. 1.56 against the Euro, 2.22 rupees against the Pound Sterling (GBP), 92 paisas against the Canadian Dollar (CAD), and 35 paisas against the Australian Dollar (AUD).

It also lost 23 paisas each against the Saudi Riyal (SAR) and the United Arab Emirates Dirham (AED).

Pakistan’s current account balance swung to a deficit year-over-year in July 2021, logging a deficit of $773 million as compared to a surplus of $583 million in the same month last year.

Afghanistan’s political transition disrupted its dollar supply. This caused an outflow of dollars from Pakistan to Afghanistan, which placed additional pressure on the Rupee

Source: Pro Pakistani