Rupee closes simply shy of all-time low in opposition to the greenback

Final week, the native foreign money dropped to an all-time low of Rs169.12 in opposition to the US greenback within the inter-bank market.— Reuters/File
  • Native foreign money depreciates round 0.21% in opposition to the buck on Thursday.
  • Since Might 14, the rupee has cumulatively misplaced 11%.
  • “Stress [on currency] constructed up owing to larger imports and greenback outflows to Afghanistan previously,” says finance minister.

KARACHI: Owing to issues on the macro degree, the Pakistani rupee closed but once more close to its all-time low in opposition to the US greenback on Thursday.

The rupee misplaced 35 paisas (0.21%) to shut at Rs169.03 in opposition to the buck within the inter-bank market, in accordance with information launched by the State Financial institution of Pakistan (SBP).

Final week, the foreign money had dropped to an all-time low of Rs169.12 in opposition to the US greenback.

The foreign money has maintained a downtrend since Might 14, 2021 — when it touched a 22-month excessive of Rs152.27 — and has misplaced a cumulative 11% (or Rs16.76) previously 4 months.

On Wednesday, Finance Minister Shaukat Tareen cited rising oil costs and the import of automobiles as main causes behind the depreciation within the worth of the rupee.

He stated: “Pressures have constructed up owing to larger imports as oil and LNG costs elevated considerably in six months, car imports, greenback outflows to Afghanistan as a substitute of inflows previously and perceptions that speculators and importers additionally exploited.”

Nonetheless, the true efficient change price (REER) was virtually near market price with an about Rs2 per greenback distinction.

It’s pertinent to say right here that the central financial institution in its Financial Coverage Assertion — launched earlier this week — had famous that the versatile market-based change price regime has carried out properly since its introduction in June 2019, together with by way of the COVID shock.

“Since its flotation, the rupee has moved in an orderly method in each instructions and has depreciated by solely 4.8% since July 27, a lot lower than many different rising market currencies over the identical interval,” it argued.

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