Rupee continues plunging against the US dollar, setting seventh all-time low of 177.89 during nine sessions of December.
According to the State Bank of Pakistan, the dollar opened at Rs177.71 in the interbank market and closed at Rs177.89, shedding 10 paisas (-o.10 percent). Within the open market, the rupee was traded at 179.50/180.30 per dollar.
Earlier during this December, the dollar hit then highest ever levels of Rs177.71 on December 10, Rs177.61 on December 9, Rs177.43 on December 8, Rs176.79 on December 7, Rs176.77 on December 3 and Rs176.42 on December 02. Overall, the local currency shed 94 paisas against the greenback during the last week. The rupee’s depreciation during the ongoing fiscal year 2021-22 has been Rs20.47 and Rs17.74 in the current year 2021.
The experts said that the rupee is hovering around an all-time low as the currency is undergoing a fundamental realignment which left the market perplexed about the direction in many ways. They said that nothing is helping stop this free fall whether it is inflow of funds, higher remittances or high interest rate. They were of the view that the free fall of the rupee is due to 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.
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