KARACHI: In line with expectations, the Pakistani currency continued to lose ground on the back of deteriorating macroeconomic indicators.
The rupee lost Rs1.07 in the inter-bank market on Monday to close at Rs159.86. Market analysts were of the view that challenges on the external front were likely to keep the rupee under pressure. AHL Head of Research Samiullah Tariq told The Express Tribune that stagnant exports and high current account deficit were key factors behind the depreciation. “It is the same issue, our exports do not grow and the current account deficit is still 5% of GDP, which doesn’t seem sustainable.”
The currency has dropped a cumulative Rs2.54, or 1.61%, since Monday last week, closing at Rs159.86 to the US dollar in the inter-bank market.
The gradual drop in the rupee came due to high demand for the dollar against thin supply as the country continued to make aggressive international payments to partially pay off huge foreign debt and for imports.
Alpha Beta Core CEO Khurram Schehzad said the exchange rate had likely normalised now. “The parity should be expected to move both ways, based primarily on demand and supply of dollar in the market,” he added.
In its third quarterly report on the state of economy for FY19, the central bank stated, “The mounting pressure on the Pak rupee-US dollar exchange rate over the past few quarters seemed to have eased in Q3 FY19 owing to the external hefty FX inflows received during the quarter.”
Gold surges to new high
Gold prices jumped Rs1,000 or 1.23% to a new all-time high at Rs82,600 per tola (11.66 grams) following depreciation of the rupee on Monday.
Rays Commodities Chief Operating Officer Adnan Agar said gold had emerged as a safe haven for global investors due to growing tensions between the US and Iran and slowdown in the global economy due to the US-China trade spat.
Published in The Express Tribune, July 16th, 2019.