Rupee continues free-fall against dollar

KARACHI: The rupee continued to decline against the dollar on Monday, as it lost 43 paisas to reach a new historic low of Rs174.43 in the interbank foreign exchange market, dealers said.

The rupee recorded the previous historic low of Rs174 against the dollar on October 22, 2021.

The dealers said the external payments had kept the local currency under pressure during the day. The exchange rate also remained under pressure, as the market was opened after two weekly holidays, they added.

The demand for the greenback remained high, owing to widening of the current account and trade deficits. Further, the massive reduction in the official foreign exchange reserves of the State Bank of Pakistan (SBP) also put pressure on the dollar demand.

The foreign exchange reserves of the State Bank recorded a decline of $1.646 billion to $17.492 billion by the week ended October 15, 2021, compared with $19.138 billion by the week ended October 8, 2021.

The current account deficit ballooned to $3.4 billion during July–September 2021, compared with a surplus of $865 million in the corresponding period of the last fiscal year, the SBP said.

The import bill showed a 66.11 per cent growth to $18.74 billion during the first quarter of the current fiscal year, compared with $11.28 billion in the corresponding quarter of the last fiscal year.

The rupee is facing a continuous fall since the start of the current fiscal year. The local currency recorded a depreciation of Rs16.90, or 10.72 per cent, against the dollar, compared with the value of Rs157.54 against the greenback on June 30, 2021 with Rs174.43 as of October 25, 2021.