Rupee depreciation continues as dollar touches fresh high

KARACHI: The deterioration in the rupee value continued on Friday, as the dollar hit another high of Rs177.71 in the interbank foreign exchange market, dealers said.

The exchange rate witnessed a 10 paisas decline in the rupee value to end at Rs177.71 against the dollar from the last day’s closing of Rs177.61, the previous record low of the local currency, in the interbank foreign exchange market.

The dealers said the higher demand for the dollar remained high for import payments. They said improvement in the foreign exchange reserves had also failed to support the local currency.

The foreign exchange reserves of the country grew to $25.15 billion by the week ended December 3, 2021, compared with $22.499 billion a week ago, the State Bank of Pakistan (SBP) said.

The rise in the forex reserves may be attributed to the deposit placed by the Saudi Fund for Development (SFD) with the SBP a week earlier.

The dealers said the higher commodity prices in the international markets and rising domestic demand push up the demand for the dollars for import payments.

The import bill sharply increased 69.17 per cent to $32.93 billion during the first five months (July-November) 2021/22, compared with $19.47 billion in the same period of the last fiscal year.

The rising import bill widened the trade deficit massively. The trade deficit ballooned 112 per cent to $20.59 billion during the first five months of the current fiscal year, compared with the deficit of $9.72 billion.

The rupee remained under pressure during the current fiscal year. The local currency lost Rs20.71, or 12.8 per cent, compared with the exchange rate of Rs157.54 on June 30, 2021 with the closing of Rs177.71 on December 10, 2021.

However, in the open market, the buying and selling of the dollar was recorded at Rs178.60/Rs180.35 at 3:35PM PST.

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