A Reuters file image.
With a fresh depreciation of Rs0.98, the local currency has dropped by a cumulative Rs3.16 or around 2% in the last three days (May 28 to June 1) to Rs164.08 against the greenback in the inter-bank market, according to the State Bank of Pakistan (SBP).
The demand for dollars remained high in the market, as traders foresaw surge in imports since domestic economic activities were on the rise with continuous ease in the lockdown despite an increase in the cases of Covid-19 in Pakistan, currency dealers said. On the other hand supply of the foreign currency continued to drop, as workers’ remittances - which stand one of the two big sources of the foreign currency flow into the country - are declining since Eidul Fitr (observed on May 24) under the global partial lockdown.
The remittances slow down every year after Eid, but this year the inflows have plunged badly due to the global health and economic crises.
Pakistani expatriates had managed to send higher remittances during initial weeks and months of the lockdown. Besides, there are reports of massive layoffs globally, they added. Furthermore, export earnings - which are another source of the foreign currency flows into the country - have also badly been hit by the health and economic crises. The crises have impacted income of people and their purchasing power as well, they said. Some of the research houses anticipated the value of rupee to stand at 165-170 against the greenback by the end of June 2020.
Published in The Express Tribune, June 2nd, 2020.
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