The Pakistani currency has maintained its record downward streak on the seventh successive day, as it hit a new all-time low of Rs170.66 against the US dollar in the inter-bank market on Thursday in the wake of rising demand for the foreign currency to pay for imports.
The country’s import bill is on the rise partly due to uptick in demand for imported commodities like energy (oil and gas) and partly due to strong surge in global commodity prices in recent months.
The local currency has cumulatively depreciated by 1.46% (or Rs2.47) in the past 10 days or since it breached through the 13-month old record low of Rs168.43 seen in August 2020, according to State Bank of Pakistan (SBP) data.
In the open market, the value of domestic currency depreciated by a fresh Re1 to record low at Rs173.50 against the greenback, according to Exchange Companies Association of Pakistan (ECAP).
The country saw record high imports worth $6.5 billion in the single month of August compared to $5.5 billion in the prior month of July. “The import bill is expected to remain high considering significant surge in oil and other commodity prices at world markets in recent days…and Afghanistan’s increasing dependence (legal and illegal) on Pakistan to feed its people,” ECAP President Malik Bostan said while talking to The Express Tribune.
Oil reached hit three-year high close to $80 per barrel at international markets on Monday.
Pakistan’s monthly import bill surged to $6.5 billion compared to combined receipts of exports and workers’ remittances at around $5 billion, showing the gap between the foreign currency flows into the country and outflows has widened by $1.5 billion in the single month, Bostan said.
He said Pakistan has been supplying foods to the war-torn neighbouring country Afghanistan through trucks since US has denied access of Taliban to Afghanistan’s foreign exchange reserves. “This is one of the key reasons for increased import bill of Pakistan. We have continued to import expensive wheat and sugar to overcome shortages of the foods.”
Published in The Express Tribune, October 1st, 2021.
Like Business on Facebook, follow @TribuneBiz on Twitter to stay informed and join in the conversation.
1723017873-0/Katy-Perry-(1)1723017873-0-270x192.webp "katy perry under investigation for environmental impact during video shoot in balearic islands")
COMMENTS
Comments are moderated and generally will be posted if they are on-topic and not abusive.
For more information, please see our Comments FAQ