Pakistani Rupee to U.S. dollar exchange rate hits record low-News

On Tuesday, the Pakistani rupee fell against the US dollar and other major currencies for the fifth consecutive trading day, and the inter-bank market fell another 37 paisa, or 0.22%.

The exchange rate of the currency against the US dollar hit a record low, closing at 169.97 in the inter-bank market. The opening price was US$169.60, but despite the central bank and the government taking measures to strengthen the currency, the decline continued. On the open market, the U.S. dollar is trading at 171.50 rupees.

So far this year, the rupee has depreciated 5.96% against the U.S. dollar. According to Capital Stake, it has fallen by 10.41% against the U.S. dollar since hitting its recent peak on May 14, 2021.

Samiullah Tariq, head of research and development at Pakistan Kuwait Investment Corporation (Private) Limited, said that the rupee should be consolidated at the current level against the US dollar and other currencies.

“I think the rupee has depreciated about 11% against the US dollar since June, and there is no room for further decline,” Tariq told Khaleej Times on Tuesday.

Economists believe that the expansion of the current account deficit is the main reason for the currency depreciation. They also warned that due to currency devaluation, a new wave of inflation may hit the country.

The rupee depreciated 0.22% against the UAE Dirham to close at 46.27. It fell 0.14% (198.65) and 0.02% (232.40) against the euro and the British pound, respectively.

Analysts said that the rise in commodity prices in the international market, the sharp rise in freight rates, and the imminent repayment of foreign debts also put pressure on the Pakistani currency.

In addition to the ever-increasing current account deficit, foreign exchange dealers stated that the flow of U.S. dollars to neighbouring Afghanistan puts additional pressure on Pakistan’s currency, as it is estimated that an average of 5 to 6 million U.S. dollars flows from Pakistan to Afghanistan every day.

“Due to the uncertainty of the situation in Afghanistan, rising oil prices and current account deficits, the rupee may continue to be under pressure,” Tariq said.

– Muzaffarrizvi@khaleejtimes.com

Muzaffar Rizvi

The business editor/news editor of Khaleej Times is a well-connected reporter and economic and financial commentator. Since 1997, he has been engaged in mainstream journalism, covering the UAE’s economy and key sectors. He has a graduate degree in economics and has won many awards for his true and insightful reports on global and regional business and economic trends.