Rupee falls to new low of 222 against dollar in interbank

Politicians, analysts raise alarm over record depreciation of local currency

Islamabad: The rupee shattered all previous records on Tuesday, falling to a new low of 224 against the dollar in afternoon interbank trade, before closing at 221.99.

According to State Bank of Pakistan (SBP), the local currency fell by Rs6.79 in the interbank market, depreciating by 3.06% against yesterday’s close of Rs215.20.

Mettis Global Director Saad Bin Naseer said the rupee was seeing a decline due to “panic buying [of the dollar] by banks in the interbank market”.

He said that “panic is setting in the financial markets following fears of change in [the] government in Punjab and Centre” after the by-polls on the province’s 20 seats.

Alpha Beta Core Chief Executive Officer Khurram Schehzad, however, pointed out that to factors beyond the domestic political and economic situation.

He attributed the rupee’s rapid decline to Fitch’s downgrading and the global trend. “The dollar is getting stronger in the global market against almost all the world currencies. The Pakistani rupee is not an exception,” he said.

It may be mentioned here that this was the highest day-on-day depreciation after June 26, 2019 when the currency fell by Rs6.80.

Meanwhile, the local currency’s shock slide within a matter of a few hours drew sharp criticism from various corners.

Former prime minister and PTI Chairman Imran Khan said that when he was ousted via a vote of no confidence, the dollar stood at Rs178. “Today it is Rs224 and in free fall despite IMF agreement. The economic meltdown shows Sharifs never had any expertise in running economy or administration. Their only expertise is looting, money laundering and getting NROs,” he added.

“We need a full time SBP governor and [Minister for Finance] Miftah Ismail to refocus on this issue. Free fall of rupee guarantees economic disaster and free fall of government too,” Journalist Mohammad Malick said.

Economic journalist Shahbaz Rana lamented that the rupee had lost Rs10 in value in just two days and warned that petrol and electricity prices will increase to “unimaginable levels” if the dollar’s ascent is not controlled.

 

 

 

 

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