KARACHI: The Pakistani rupee faced a new milestone of depreciation against the US dollar in the open market.
In the open market, the value of the dollar surged by Re1 and concluded at Rs 315, marking an increase from its previous rate of Rs 314 on Monday, as reported by currency dealers.
While the US dollar exhibited strength, the Pakistani rupee also experienced a significant decline against the dollar in the inter-bank market, reaching an unprecedented low of 302 on the first day of the week. The State Bank of Pakistan (SBP) confirmed that the rupee’s value decreased by Re1 or 0.33% by the close of the trading session.
In the week prior, the rupee sustained continuous drops throughout all five trading sessions, eventually touching a historic low of 301 against the US dollar. Despite undergoing a 1.7% reduction against the dollar, the disparity between the inter-bank exchange rates and the rates in the open market remained higher than the limit outlined by the International Monetary Fund (IMF). This raised concerns about the potential for further downturns in the inter-bank market.
The combination of Pakistan’s escalating imports due to eased restrictions and the diminishing foreign exchange reserves, coupled with the absence of foreseeable inflows, is placing substantial strain on the rupee’s valuation. In a related context, the SBP clarified that it does not possess the authority to impose bans on imports of specific items, as this responsibility falls under the jurisdiction of the Ministry of Commerce (MOC).
On a global level, the US dollar underwent a decrease following its 12-week high on Monday. This shift in trajectory occurred as traders deliberated on the future direction of the US monetary policy subsequent to hints from Federal Reserve Chair Jerome Powell regarding the potential for additional interest rate hikes. Concurrently, the yen maintained its proximity to its lowest point in over nine months.