Pakistani rupee depreciated Rs1.08 against the US dollar for a third consecutive day reaching close to an all-time low seen in the middle of August 2020.
According to the State Bank of Pakistan (SBP), the local currency had closed at Rs166.28 against the greenback on Wednesday.
The rupee had dropped to a record low of Rs167.43 to the greenback in August 2020.
Since May the dollar has been rapidly marching towards its peak of Rs168 attained in August 2020 after foreign investments including hot money invested in domestic bonds started flying back to their destinations amid pandemic impact that began from middle of March 2020.
Local media reports state that authorities are letting the rupee depreciate to discourage rising imports and encourage exports in an attempt to narrow down the widening trade deficit; however, fear of higher current account deficit (CAD) in FY22 is convincing buyers to book more dollars for future imports.
It is pertinent to mention here that the country’s the forex reserves of the country are at the peak.
Moreover, Pakistan set to hold staff-level talks with the IMF on resuming the programme in September.
