The downfall of Pakistan rupee continued in early trade as it was traded at 160.30/161 in the interbank market on Wednesday.
The rupee is under pressure due to sharp cut rate and significant stimulus package. The central bank intervention has not been seen as yet.
On Tuesday, the State Bank of Pakistan (SBP) cut its benchmark policy rate by 150 basis points to 11 per cent, a week after lowering the cost of borrowing by 75 bps.
After the SBP’s decision, the Pakistani rupee came under pressure in interbank trade. Foreign investors who had parked their investment in government treasury bills are pulling hot money due to interest rate cuts. Remittances are decreasing due to spread of coronavirus across the globe. These factors are putting pressure on Pakistani rupee in the interbank market.
On the contrary, in the international currency market, the dollar has slipped as a greenback liquidity crunch loosened slightly. The euro traded at $1.0808 up 0.15% after four straight days of gains. The dollar dropped 0.3% against the yen to 110.85, off a one-month high of 111.715 touched the previous day.