KARACHI
Pakistani rupee plunged to another low of 301 against the US dollar in the interbank market on Friday, depreciating by 78 paisas (-0.26 percent).
The State Bank of Pakistan (SBP) said in a tweet that the rupee opened at 300.22 against the dollar in the interbank market and closed at 301.
The rupee has been witnessing the all-time lowest levels against the dollar for the last four sessions. Earlier, the rupee hit all-time lows of 300.22 on Thursday, 299.64 on Wednesday and 299.01 per dollar on Tuesday last.
Prior to these lows, the rupee fell to 298.93 per dollar on May 11, 2023 in the backdrop of a deepening political turmoil and widespread law and order disturbances after former prime minister Imran Khan’s arrest in a case. Interestingly, all these lows have been recorded when the former prime minister was/is in jail.
The rupee depreciated by Rs5.22 during this week. During the current fiscal year 2023-24, Pakistani rupee has shed Rs15.01 against the US dollar in the interbank market, while it plummeted by Rs73.57 against the greenback in the current year.
Similarly, the local unit depreciated against the greenback in the open market by Rs2 (-0.63 percent).
The rupee was quoted in the range of 315-318 against the dollar in the open market as compared to 314-316 a session earlier. In the black market/Hundi, the dollar was traded at Rs332 against Rs330 a session earlier.
According to currency experts, the demand for the dollar remained high as imports are opening up gradually.
They said the rupee’s recent decline can be attributed to the removal of restrictions on letters of credit (LCs), which has led to an increased demand for dollars and subsequently weakened the rupee.
They said that the local unit continues to face immense pressure amid political uncertainty surrounding the general elections, which is causing turbulence in local markets.
They said the rupee’s depreciation was expected, as under the agreement with the International Monetary Fund (IMF), the difference between the open market and the interbank market should be one percent. They said that the open market is witnessing an upward trend, adding that this also has an effect on the interbank market.
On the other hand, foreign exchange reserves held by the SBP decreased by $125 million on a weekly basis, clocking in at $7.93 billion as of August 18. Total liquid foreign reserves held by the country stood at $13.25 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.
