The PKR drops 0.52 pc against the USD on a weekly basis
The Pakistani rupee continued its streak of losses against the US dollar in the interbank and lost 0.89 rupee (-0.52%) over the past week, mainly due to the high import bill and the volatile situation in neighboring Afghanistan.
According to the State Bank of Pakistan, the US dollar opened at Rs 168.19 last Monday in the interbank and closed at Rs 169.08 on Friday, the last working day of the week.
The Pakistani rupee has lost 0.89 rupees over the past five days against the US dollar, while the depreciation in fiscal year 2021-2022 was 11.66 rupees. The local unit lost Rs 8.81 against the US dollar during the year 2021. The local currency maintained a declining trend after hitting a high of Rs 152.27 in May 2021, losing an amount accumulated Rs 16.77 over the past four months. month to date.
Over the past week, the rupee weakened by 53 paisa (-0.31%) against the US dollar on Monday and closed at Rs 168.72. However, the local unit rallied on Tuesday and gained 20 paisa (+ 0.12%). However, the following three sessions proved difficult for the rupee and it weakened by 16 paisa (-0.09%), 35 paisa (-0.21%) and five paisa (-0.03%) respectively. Wednesday, Thursday and Friday. However, the rupee remained above its all-time low against the greenback of Rs 169.12 seen on September 15, 2021. In the open market, the rupee traded at Rs 169 / 170.50 for a dollar during the week.
According to experts, the rupee-dollar parity will depend on the initiatives taken by the central bank to support the position of the balance of payments. They said several factors impacted the value of the rupee during this period, including widening trade deficit, current account deficit, uncertainty in Afghanistan and others.
The main factors that have deteriorated the value of the rupee can be attributed to political uncertainty in Afghanistan. Following the Taliban takeover, Afghanistan’s foreign exchange account in the United States was seized, creating a cash flow problem for the neighboring country for import payments. The other major problem is the widening current account deficit. The current account deficit was recorded at $ 2.29 billion in the first two months (July-August) 2021, compared to a surplus of $ 838 million in the same months of the previous fiscal year. The widening current account deficit can be attributed to large trade deficits and a slower pace of inflows in the form of export earnings and workers’ remittances.
After the rupee hit an all-time low of Rs 169.12 on September 15, 2021, the State Bank of Pakistan (SBP) reportedly stepped in to support the local currency. However, the intervention was not enough to support the rupee. To support the balance of payments situation, the central bank took a major decision on September 23, 2021 to ban bank financing of imported vehicles.
In addition, the State Bank also limits bank loans in terms of money and time for locally assembled motor vehicles.