Rupee depreciates 0.76% to Rs163.67
The Pakistani currency hit almost 10-month low at Rs163.67 against the US dollar in the inter-bank market on Monday partly due to increase in demand for the greenback in the wake of rising import payments and huge foreign debt repayments.
The rupee touched an even lower level in intra-day trading at Rs164.05, according to a source. It depreciated Rs1.24 (or 0.76%) on Monday compared to Friday’s close of Rs162.43, according to the central bank data. Cumulatively, the rupee has dropped by almost 4% (or Rs6.13) in the past one month or since the beginning of current fiscal year on July 1.
“The rupee is losing ground partly due to increased pressure of import payments,” Topline Securities Director Research Syed Atif Zafar said while talking to The Express Tribune. On the other hand, the US dollar is also gaining strength against major world currencies. “This is another reason for the drop in rupee’s value,” he said.
“The local currency is expected to fall to Rs166-168 against the greenback by the end of December 2021.”
He said that additional demand for dollar was being generated in the wake of a persistent uptrend in international petroleum oil prices. Pakistan heavily relies on energy imports. The rupee has been on the decline since touching a 22-month high of Rs152.27 in March 2021.
Read More: Rupee strengthens against dollar
It also faced the downturn in the past week after the central bank announced that Pakistan’s current account deficit would widen to 2-3% of gross domestic product (GDP) in the ongoing fiscal year compared to 0.6% in FY21.
The drop would come on the back of a surge in imports, it said. Moreover, the fourth wave of Covid-19 in Pakistan is likely to take a toll on the economy.
The government of Sindh has imposed a lockdown in the province from July 31 to August 8, which has partially impacted economic activities.
“The end of amnesty scheme for the construction sector in June is a reason for the rupee depreciation these days,” Exchange Companies Association of Pakistan (ECAP) President Malik Bostan said.
Published in The Express Tribune, August 3rd, 2021.
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