The Pakistani rupee continued to register losses against the US dollar, depreciating 0.58% during trading Tuesday, nearing its all-time low of 298.93 seen on May 11, 2023.
At around 1pm, the rupee was hovering at 298.85, a decrease of Rs1.72 in the inter-bank market.
On Monday, it remained under pressure against the US dollar, as it settled at 297.13.
In a key development, caretaker Finance Minister Shamshad Akhtar held her first meeting on the power sector after assuming charge.
On condition of anonymity, an official told Business Recorder that the power sector is a major challenge for the caretaker government, as for all previous governments, due to power theft and non-recovery of billed amount.
Fahad Rauf, Head of Research at Ismail Iqbal Securities Limited, told Business Recorderon Tuesday that the rise in import payments, after the International Monetary Fund (IMF) demanded to lift import restrictions, is leading to increase demand for the greenback.
“This was reflected in the $0.8 billion current account deficit recorded in July,” he said.
“Moreover, there is also a need to narrow down the rate gap in inter-bank and open market, which have risen in recent days thus the market is catching up to it,” he added.
The expert noted that inflation rate has not lowered as expected, amid hikes in energy prices, which is also keeping the local currency under pressure.
Internationally, the US dollar held close to a 10-week peak versus a basket of major peers, and near its highest since November against the yen, as Treasury yields rose made fresh post-financial crisis highs on Tuesday amid speculation US rates will be stay high for longer.
The US dollar index – which measures the currency against six developed-market counterparts, including the yen and euro – slipped 0.1 to 103.24, but remained not far from Friday’s high of 103.68, a level not seen since June 12.
Oil prices, a key indicator of currency parity, edged lower on Tuesday as the market waited to see if Iraqi oil exports resume, which could ease the supply tightness caused by the OPEC+ cut, while a faltering Chinese economy continued to undercut the global demand outlook.
