Pakistan rupee extended losses against the US dollar for the third straight week, down by Re0.94 (-0.53 percent) last week.
According to the State Bank of Pakistan, the US dollar opened at Rs176.77 in the interbank market on Monday last and closed at Rs177.71 on Friday, the last working day of the week. Within the open market, the rupee was traded at Rs178.50-Rs180.30 per dollar during the week.
During the last week, the rupee set four all-time new lows against the dollar. Falling rupee took a breather against the dollar in the interbank market by recovering 29 paisas on Monday, mainly due to a deposit of $3 billion to the State Bank of Pakistan (SBP) by the Saudi Development Fund (SDF).
However, it plummeted in the following four sessions in the interbank market, setting new lows against the US dollar. The local unit plunged to Rs176.79 on Tuesday, Rs177.43 on Wednesday, Rs177.61 on Thursday and Rs177.71 on Friday.
Pakistan rupee has set six all-time lows during the first eight sessions of December 2021. The other two lows, besides the four mentioned above, were witnessed at Rs176.77 on December 3 and Rs176.42 on December 02. The rupee’s depreciation during the ongoing fiscal year 2021-22 has been Rs20.29 and Rs17.56 in the current year 2021.
According to experts, the free fall of the rupee is due to the conditionalities of the International Monetary Fund (IMF). They said that the government should clarify the situation and take market participants into confidence in order to end the prevailing uncertainty as the given situation is only benefiting the speculators. They said that amid the ongoing macroeconomic conditions, the rupee should not have crossed the 165 mark against the dollar.
They said the rupee is under the pressure of soaring import bill which needs to be curtailed immediately as the depleting foreign exchange reserves will hardly cover the bill for around three months if it continues to report around the same figures.
Official data revealed that Pakistan’s trade deficit ballooned by 112 percent to $20.59 billion during the first five months (July-October) of the current fiscal year 2021-22. The trade deficit was at $9.72 billion in the same months of the last fiscal year. The import bill surged by 69.17 percent to $32.934 billion during July–November 2021-22 as compared to $19.468 billion in the same period of the last fiscal year.
However, the government is looking for ways to make a substantial decline in the import bill. In this connection, Advisor to the PM on Finance Shaukat Tarin advised the concerned authorities to take effective policy measures to reduce unnecessary imports of luxury items.
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