Rupee falls to historic low against dollar

KARACHI: The rupee fell 47 paisas to record low at Rs178.98 to the dollar on Monday owing to higher import payments.

The exchange rate ended at Rs178.98 to the dollar from last Friday’s closing of Rs178.51 in the interbank foreign exchange market.

The dealers said that the political uncertainty and dollar demand for Ramzan related imports depressed the rupee value coupled with volatile oil prices in the international markets which also contributed to the rupee depreciation.

Previously, the rupee fell to the all-time low at Rs178.63 to the dollar on March 10, 2022.

The dealer said that the no-confidence motion moved by the opposition parties resulted in the political uncertainty. The panic buying in the forex market was seen due to this reason. Further, the import of commodities related to Ramzan was also seen which kept the local currency under pressure.

The dealers said that the market was opened after two weekly holidays where an escalation in the dollar demand was seen.

The oil prices in the international markets are still above $108 per barrel, which is much above the calculated prices of the petroleum products in the domestic market.

It is worth mentioning that the government had announced to reduce Rs10 per liter each on petrol and diesel. In order to lower the prices, the government was absorbing billions of rupees loss every month through zero rating of sales tax on petroleum products and lowering the petroleum levy.

Pakistan is a net importer of petroleum products and changes in the prices directly affects the oil import bill.

The import bill of the petroleum group recorded an increase of 107 per cent to $11.7 billion during the first seven months of the current fiscal year, compared with $5.64 billion in the corresponding months of the last fiscal year.

Furthermore, the fall in the foreign exchange reserves also put pressure on the rupee value. The liquid foreign exchange reserves of the country slipped by $206 million to $22.669 billion by the week ended March 04, 2022, as against $22.875 billion a week ago.

The local currency remained under pressure since the start of the current fiscal year. The rupee lost Rs21.44 or 13.60 per cent from Rs157.54 to dollar on June 30, 2021 to the current level of Rs178.98.

At the open market, the buying and selling of the dollar was recorded at Rs178.8 and Rs179.9 at 4:15pm PST.