Rupee falls 74 paisas against dollar

KARACHI: The rupee witnessed a decline of 74 paisas against the dollar on Wednesday, as external payments jacked up the demand for the foreign currency, dealers said.

The exchange rate ended at Rs175.04 against the greenback from the previous day’s closing of Rs174.30 in the interbank foreign exchange market.

The dealers said the demand for the dollar for import and corporate payments kept the local currency under pressure.

Last weekend, the State Bank of Pakistan (SBP) announced an increase of 150 basis points in the key discount rate to bring it at 8.75 per cent. The rate was increased to ease pressure on the local currency. Following the announcement, the market witnessed recovery in the local unit; however, the external payment pressure needs more efforts from the regulator.

The dealers said large imports are still a threat to the rupee stability. The import bill also resulted in a ballooning current account deficit.

Pakistan’s current account deficit sharply widened to $5.08 billion during the first four months (July-October) of the current fiscal year, compared with a surplus of $1.31 billion in the same period of the last year.

The rupee remained under pressure since the start of the current fiscal year. The local currency fell Rs17.50, or 11.11 per cent from June 30, 2021 closing of Rs157.54 to the closing of Rs174.04 on November 24, 2021.

The rupee hit an all-time low of Rs175.73 against the dollar on November 12, 2021 in the interbank foreign exchange market.

In the open market, the buying and selling of the dollar have been recorded at Rs175.75/Rs177.25 at the time of the filing of this report.

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