Rupee plunges to new low against dollar
KARACHI: The rupee plunged to a new low against the dollar on Monday, as import restrictions are not sufficient to support the local currency, dealers said.
The exchange rate ended at the new low of Rs170.80 against the dollar from last Friday’s closing of Rs170.48 in the interbank foreign exchange market.
The rupee hit an all-time low at Rs170.66 against the dollar on September 30, 2021.
To support the rupee and the balance of payments position, the central bank on September 30, 2021 imposed a 100 per cent cash margin requirement on additional 114 items.
Previously, the SBP had taken similar initiative to discourage imports of non-essential and luxury items. With the latest condition the total items required cash margin requirement are now 525 items.
“The measure will help discourage imports of these items and; thus, support the balance-of-payments.”
The State Bank of Pakistan said 100 per cent cash margin requirement was initially imposed, in 2017, on 404 items to discourage the import of largely non-essential and consumer goods. The list was also expanded in 2018. However, to enable businesses to absorb the shocks of Covid-19 pandemic, the SBP provided relief by removing CMR on 116 items.
The currency dealers said the rupee was under pressure, as the market opened after two weekly holidays.
Further, external payments in terms of imports and corporate remained major concerns for the rupee stability.
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