Rupee falls against dollar due to external payments

KARACHI: The Pakistani rupee declined 25 paisas against the dollar on Monday, amid high demand for the foreign currency for external payments, dealers said.

The rupee ended at Rs176.49 against the dollar from last Friday’s closing of Rs176.24 in the interbank foreign exchange market.

The dealers said the dollar demand remained high during the day due to the external payments for imports, as the market opened after two weekly holidays.

The rising oil prices in the international market and a decline in the foreign exchange reserves of the country remained key challenges for the rupee stability.

The local currency during the day declined, despite the measures taken by the State Bank of Pakistan (SBP) regarding restrictions on realising the export receipts to provide support to the rupee.

On January 5, 2022, the SBP directed the exporters to realise their export receipts within 120 days from the date of shipment instead of 150 days, they said.

The government on December 30, 2021 introduced the bill to meet one of the conditions of the International Monetary Fund (IMF) for approval of the next tranche of over $1 billion.

Following the passage of the bill by the National Assembly on January 13, 2022, the president also granted ascent to the bill to make it effective.

The rising oil prices may weaken the rupee value in the coming days, as Pakistan is the net importer of petroleum products to meet domestic energy demands.

The country’s oil bill sharply increased by 113.39 per cent to $10.18 billion during the first half (July-December) 2021/22, as compared with $4.77 billion in the corresponding half of the last fiscal year.

The local currency remained under pressure since the start of the current fiscal year due to higher external payments. The rupee fell 18.95, or 12.02 per cent, from Rs157.54 to the dollar on June 30, 2021 to Rs176.49 on January 24, 2022.

The rupee hit an all-time low of Rs178.24 on December 29, 2021.

In the open market, the buying and selling of the dollar was recorded at Rs178/Rs179.5 at 4:00pm PST.

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