KARACHI
Pakistani rupee completed a hat-trick of setting all-time new lows against the US dollar in the last three trading sessions, with the local currency falling to 173.96 on Thursday amid talks between the government and the International Monetary Fund (IMF) for resumption of $6 billion Extended Fund Facility (EFF).
According to the State Bank of Pakistan, the rupee shed Rs0.49 (-0.28 percent) as the US dollar opened at Rs173.47 and closed at Rs173.96. Within the open market, the rupee was traded at 173.80/ 175 per dollar.
The Pakistani rupee shed Rs2.68 during the last three sessions against the US dollar, while depreciation during the fiscal year 2021-22 has been Rs16.54.
The local unit has shed Rs13.69 against the US dollar in the current year 2021. The local currency has maintained a downtrend after it touched 22-month high of Rs152.48 in May 2021, losing a cumulative Rs21.65 in the past five months to date.
According to currency experts, the local unit touched the 174 mark in the interbank market during the session. They were of the view that rupee is falling due to talks with the IMF, as reportedly the international lender wants further depreciation in rupee till it nears 182 against the dollar.
Further, the reports of significant widening in the current account deficit also put pressure on the dollar’s demand. The current account deficit ballooned to $3.4 billion during July-September 2021, compared to a surplus of $865 million in the corresponding period of the last fiscal year, the State Bank of Pakistan (SBP) reported.
The import bill showed a 66.11 percent growth to $18.74 billion during the first quarter of the current fiscal year as compared to $11.28 billion in the corresponding quarter of the last fiscal year. Higher import bill also widened the trade deficit by 102 percent.
The trade deficit swelled to $11.75 billion during July-September 2021, compared to a deficit of $5.81 billion in the same quarter of the last fiscal year.
The central bank has taken a number of steps to ease the pressure on the exchange since August but the local currency continues to fall against the US dollar.
The central bank has earlier introduced regulatory measures to enhance transparency in the foreign currency transactions by exchange companies and curb undesirable outflow of foreign currency.
Exchange companies will be required to conduct biometric verification for all foreign currency sale transactions equivalent to US$500 and above and outward remittances and it will be applicable with effect from October 22.
Moreover, the State Bank of Pakistan earlier issued guidelines that persons travelling to Afghanistan would be allowed to carry only $1,000 per person per visit with a maximum annual limit of $6,000. However, all such measures have so far failed to stop rupee devaluation.
