KARACHI
Pakistani rupee lost further ground against the US dollar in the interbank market and licked another all-time low of 305.64, with a depreciation of 17 paisas (-0.06 percent) on Monday.
The State Bank of Pakistan (SBP) said in a tweet that the rupee opened at 305.47 against the dollar in the interbank market and closed at 305.64. The rupee registered eight consecutive all-time lows against the US dollar in the interbank market prior to this one in the previous two weeks.
The rupee depreciated against the US dollar in the interbank market by Rs4.47 last week, Rs19.65 during the current fiscal year 2023-24, and Rs78.21 in the current year.
Similarly, the local unit depreciated against the greenback in the open market by Rs5 (-1.54 percent). The rupee was quoted in the range of 331-334 against the dollar in the open market as compared to 324-329 a session earlier. In the black market/Hundi, the dollar surged to Rs350 as compared to Rs345 in the previous session.
The local unit has been under pressure against the US dollar, especially in the open market, after the government lifted import restrictions, a key condition of the International Monetary Fund (IMF). Economic analysts have urged the authorities to find avenues to attract dollar inflows, as depletion of reserves is quickly eroding confidence on the local currency.
The consistent devaluation of the rupee is not only causing inflation but is also compelling the central bank to raise interest rates to mitigate the repercussions of uncontrolled depreciation of the local currency, according to bankers who manage exchange rates and imports. “The market is not in control of anyone. The steep devaluation will continue and even cross the limit given by the IMF,” a senior banker said, adding that nobody knows what is next for the exchange rate.
Meanwhile, foreign exchange reserves held by the SBP decreased by another $81 million on a weekly basis, clocking in at $7.85 billion as of August 25, data released on Thursday showed. Total liquid foreign reserves held by the country stood at $13.17 billion. Net foreign reserves held by commercial banks stood at $5.32 billion. The central bank cited debt repayments as the reason for the decrease in the foreign currency reserves.
Earlier, Pakistan’s sovereign dollar bonds slid on Thursday last amid a broader emerging market debt rout. The 2031 maturity fell the most, by 2.5 cents, but several were down by 2 cents or more, according to Tradeweb data.
