Rupee falls against dollar for tenth consecutive session

KARACHI: The rupee fell for the tenth consecutive session on Thursday as the country is facing renewed economic uncertainties over the devastating floods besides a surging dollar.

The exchange rate witnessed a loss of Rs1.56 to reach Rs235.88 against the dollar from the previous day’s closing of Rs234.32 at the interbank exchange market.

Currency experts said that the local unit remained under pressure due to increased dollar demand for the import of essential food items.

The resumption of the International Monetary Fund (IMF) was expected to unlock further investment and loan agreements. However, the government has so far failed to convince friendly countries and multilateral institutions to lend support to the local economy, they added.

Additionally, the catastrophic flood across the country has resulted in major crop destruction, where the government is moving towards importing essential food items, which furthered the pressure on the local currency.

The dollar is also surging globally as the greenback is up nearly 15 percent against a basket of major currencies this year.

According to the Pakistan Bureau of Statistics (PBS) data, the trade deficit clocked-in at $3.53 billion in August, compared with $2.73 billion, showing an increase of 28.89 per cent.

During the month, the imports recorded an increase of 20.84 per cent to $6.03 billion, compared with $4.99 billion during the previous month.

The foreign exchange reserves held by the State Bank of Pakistan (SBP) recorded an increase of $1.16 billion, to clock-in at $8.8 billion in the week ended September 2, following the receipt of the $1.16 billion loan tranche from the IMF.

The total liquid forex reserves held by the country stood at $14.5 billion. The net foreign exchange reserves held by the commercial banks amounted to $5.7 billion.

The country’s current account deficit rose 531 per cent to over $17 billion during the fiscal year 2022 due to massive increase in goods import bill. Overall, the current account deficit was $17.4 billion during the fiscal year 2022, compared with $2.8 billion in the fiscal year 2021, depicting an increase of $14.6 billion.

The local currency remained under pressure since the start of the current fiscal year. The rupee lost Rs31.03 or 15.14 per cent from Rs204.85 to dollar on June 30, 2022 to the current level of Rs235.88.

At the open market, the buying and selling of the dollar was recorded at Rs240 and Rs241 at 3:00pm PST.