Rupee slides past 179 to a dollar

Higher import expectations driving currency’s decline

KARACHI:

The rupee continued to stay under pressure and fell to a historic low at Rs179.22 against the US dollar in the inter-bank market on Tuesday.

According to the State Bank of Pakistan (SBP), the Pakistani rupee had closed at Rs178.98 against the dollar on Monday.

A report of Arif Habib Limited stated that the local currency slid 0.13% day-on-day and 15.03% since the start of current fiscal year in July 2021.

Speaking to The Express Tribune, Arif Habib Commodities CEO and Managing Director Ahsan Mehanti said that the primary reason behind the fall of the rupee was expectation of higher imports in the current month.

“Oil prices soared to multi-year highs a few days ago and the market expects the rupee to bear the brunt of the development after the government froze prices of petroleum products in the country,” he said.

“The rupee is under pressure and is expected to fall further because the country has to pay for surging imports.”

Moreover, the market believes that Prime Minister Imran Khan’s subsidy on fuel prices and amnesty scheme for the industrialists would act as a hurdle in the way of seventh review of Pakistan’s economy by the International Monetary Fund.

Published in The Express Tribune, March 16^th, 2022.

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