Rupee hits 2-month low against dollar

Currency loses Rs1.47 in three days, reaches 165.71

KARACHI: The rupee on Wednesday depreciated almost Re1 to a two-month low at Rs165.71 to the US dollar as demand rose for the greenback on hopes for revival of economic activities after the UK introduced a medicine for treating coronavirus.

Successful tests of the drug also pushed up crude oil prices in the international market. With the fresh drop of Rs0.83 in rupee’s value on Wednesday, the currency has cumulatively lost Rs1.47, or 0.89%, over the past three days to Rs165.71.

“Pakistan is a net energy importer. The positive development on the health front, however, proved negative for the rupee due to higher demand for foreign currency compared to its low supply in the domestic economy,” remarked Exchange Companies Association of Pakistan Chairman Malik Bostan while talking to The Express Tribune.

Pakistan also requires a significant amount of $27 billion to repay foreign debt over the next two years. However, the inflow of dollars was expected to remain low mainly due to a notable drop in export earnings and slowdown in workers’ remittances in the wake of the Covid-19 outbreak, he said.

The local currency has come under pressure also because of increased demand for funds to fight the Covid-19 pandemic. Apart from that, Pakistan’s major agricultural crops including the staple wheat crop were facing the worst locust attack, which was estimated to cause losses of billions of rupees, he said. 

Published in The Express Tribune, June 18^th, 2020.

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