Rupee hits new record low against dollar

KARACHI: The rupee lost four paisas against the dollar to touch a new record low of Rs178.17 on Monday at the closing of the interbank foreign exchange market, dealers said.

The rupee ended at Rs178.17 against the greenback from last Friday’s closing of Rs178.13 in the interbank foreign exchange market.

Previously, the local currency hit a record low of Rs178.15 on December 22, 2021.

The dealers said the market witnessed high dollar demand for import and corporate payments because the market opened after two weekly holidays.

Although the rupee resisted due to the tightening of the foreign exchange buying by the central bank, which deterred speculative buying, the dealers said.

The State Bank of Pakistan (SBP) on December 19, 2021 imposed restrictions on foreign exchange buying by individuals from the open market to discourage speculative gains. As per the restrictions, an individual can buy a maximum of $10,000/day and $100,000 in a year.

The dealers; however, said that the demand for the dollar remained high during the day for import and corporate payments.

The widening of trade deficit and the current account deficit are major threats to the rupee stability, they added.

Pakistan’s current account deficit has ballooned to $7 billion during the first five months (July-November) 2021/22. The current account posted a surplus of $1.87 billion in the same period of the last fiscal year.

The trade deficit widened 112 per cent to $20.65 billion during the period under review, compared with the deficit of $9.72 billion in the same period of the last fiscal year.

The rupee remained under pressure since the start of the current fiscal year. The local currency fell Rs20.63, or 13.09 per cent, from June 30, 2021 closing of Rs157.54 to the closing of Rs178.17 on December 27, 2021.