Rupee dives as macroeconomic indicators worsen

Rupee dives as macroeconomic indicators worsen

Rupee dives as macroeconomic indicators worsen
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KARACHI: The Pakistani rupee fell 90 paisas against the dollar on Monday as the country’s forex reserves continue to fall coupled with uncertainty regarding the International Monetary Fund (IMF) programme.

The local unit fell 90 paisas to close at Rs187.53 to the dollar from Friday’s closing of Rs186.63 in the interbank foreign exchange market.

The dealers said that the local currency continued falling for the third consecutive session amid depleting forex reserves of the country. Additionally the uncertainty regarding Pakistan’s talks with the IMF for the revival of the loan disbursement programme also played its role in the depreciation of the rupee against the dollar.

The country has faced significant pressure on its foreign-exchange reserves in recent months, amid elevated global commodity prices and highly fluctuating global oil prices.

The depleting forex reserves continue to remain the biggest challenges to the stability of the rupee. Pakistan’s foreign exchange reserves fell by $115 million during the week ending April 30, on the back of increasing external debt payments and higher current account deficit.

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The total liquid foreign reserves held by the country stood at $16.5 billion, compared with $16.6 billion in the previous week.

The State Bank of Pakistan (SBP) reserves recorded a decline of $59 million to $10.5 billion. The reserves held by commercial banks fell to $6.0 billion.

The local currency hit the historic low of Rs188.18 on April 7, as the country faced the worst political crisis resulting in uncertain economic conditions.

The ballooning current account deficit is another reason for escalation in the dollar value. Pakistan’s current account deficit ballooned to $12 billion during the first eight months (July – February) 2021/22 against a surplus of $994 million in the corresponding months of the last fiscal year.

The local currency remained under pressure since the start of the current fiscal year. The rupee lost Rs28.15 or 19.03 per cent from Rs157.54 to dollar on June 30, 2021 to the current level of Rs187.53.

At the open market, the buying and selling of the dollar was recorded at Rs187.5 and Rs189 at 5:00pm PST.

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