Pakistani rupee maintained its losing streak against the US dollar and depreciated to 187.53 on Monday.
The State Bank of Pakistan said in a statement that the rupee opened at 186.63 against the US dollar in the interbank market and closed at 187.53 after shedding 90 paisas (0.48 percent). Within the open market, the rupee was traded at 187.50/188.50 per dollar against 186/187 a dollar a day earlier.
The rupee shed Rs0.94 against the US dollar during the last week with only one working day. Overall, the rupee has depreciated by Rs30.04 against the US dollar during the ongoing fiscal year 2021-22 and Rs11.02 during the current year 2022.
The rupee came under pressure after Eid-ul-Fitr holidays as the Middle East markets did not open and the nostro accounts failed to receive funding. As the flow of remittances remains high during the holy month of Ramazan and also due to Eid, there are possibilities that remittances may dry out for about a week or so. This factor also increased the dollar’s demand.
According to experts, gloomy macros will continue to put pressure on the local unit. They said though there is stress on the economy, yet some stability is visible. Despite better exports, the current account deficit has surged to alarming levels and in order to address this challenge, there is a need to look at the agriculture sector and curtail needless imports, they added.
On the other hand, the total liquid foreign exchange reserves held by the country decreased for the 12th consecutive week by $115 million (0.7 percent) on a week-on-week basis to stand at $16.55 billion as of the week ended on April 30, 2022, compared to $16.67 billion in the previous week, weekly data released by the State Bank of Pakistan (SBP) on Friday last showed.
Currency dealers believe that the statement of International Monetary Fund (IMF) that its mission will visit Pakistan in May to resume discussions over policies for completing the seventh review may help improve the sentiment and stabilise the rupee. Traders and markets are looking at the IMF as progress with the Fund instils investor confidence in the economy, stabilises Pakistan’s foreign exchange reserves, and unlocks funding from other international financial institutions.