The Pakistani rupee surpassed all previous records against the US dollar on Tuesday after losing 2.77 rupees, or 1.37%, against the US dollar in the interbank market.
It fell to an all-time low of 202.83 against the U.S. dollar in the interbank market as demand surged on oil-related payments and ambiguity over the multi-billion dollar stimulus, Geo News reported.
According to data released by the State Bank of Pakistan (SBP), the local currency surpassed its previous high of 202 rupees recorded on May 26.
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Moreover, for the first time in its history, the local currency made a historic drop of Rs 4.00 in a single day and broke through the threshold of Rs 204 against the greenback in the interbank market during intraday trading. reported Geo News.
Additionally, during the day, the currency faced renewed pressure after inflows of foreign currency from overseas Pakistanis through their Roshan Digital Account (RDA) plunged to a 15-month low of 189 million. USD in May 2022.
The market reversed the freefall and closed the day with a loss of nearly Rs 3.
It was the rupee’s third consecutive free fall business day. In the open market, the rupee closed at an all-time low of 204 against the greenback, according to the Forex Association of Pakistan.
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Speaking to Geo News, Arif Habib Limited Research Director Tahir Abbas said the currency was under pressure due to pending oil payments and rising oil prices in the international market.
“The plunge came on the back of a mammoth import bill and widened the current account deficit,” the analyst said.
Abbas added that the market was closely watching developments regarding the International Monetary Fund (IMF) program, which is expected to be relaunched after the budget announcement, with the government taking all possible steps to fulfill the conditions set out by the Fund.
The recent downturn began after the government raised the price of petroleum products by Rs 60 per liter following the removal of subsidies – one of the main demands of the lender.
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Traders believe caution is in order this week ahead of the unveiling of the federal budget for fiscal year 2022-23 due to be announced on June 10 (Fri), with investors expecting fiscal consolidation conditions in the IMF dominate.
Renewed pressure on the rupee following an increase in year-end dollar demand from importers and the corporate sector will keep the local currency under pressure.
Since the start of this fiscal year (July 1, 2021) to date, the Rupee has collectively fallen by 30.65% (or Rs 48.29) from the previous fiscal year’s close at Rs 157.54.
The Rupee has maintained a downward trend over the past 13 months. It has lost 33.20% (or Rs 50.56) so far, compared to the record of Rs 152.27 recorded in May 2021.
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Post expires at 2:06pm on Saturday June 18th, 2022