Rupee continues downward streak, inter-bank rate at Rs229.55

The currency has cumulatively dived by Rs10 (or 5%) in the past six consecutive working days

KARACHI:

The Pakistani rupee continued its downward streak and hit a new one-month low of Rs229.55 against the US dollar in the inter-bank market on Friday. 

The domestic currency slumped by over Rs4. This is the sixth successive working day of the downturn in the rupee. The local currency had closed at Rs225.42 on Thursday.

With the latest slump, the currency has cumulatively dived by Rs10 (or 5%) during the past six consecutive working days.

The rupee has come under renewed pressure in the wake of the strengthening of the greenback against most of the global currencies including the Japanese yen and UK pound sterling.

Read: Rupee's downward spiral continues, inter-bank rate at Rs242

The dollar hit a four-decade high against global currencies.

The widespread flood devastation in Pakistan also took a toll on the domestic currency. Authorities revised up flood losses to $20 billion compared to an initial estimate of around $4.5 billion.

The significant damage to multiple agricultural crops by the floods has increased food imports in Pakistan. Accordingly, the demand for the dollar has increased in the inter-bank market.

The condition for people arriving in Pakistan from abroad to declare the amount of money they are carrying has also mounted pressure on the domestic currency.

According to ‘An Early Assessment of Flood Impact on Pakistan’s economy’ report being compiled by the Ministry of Finance, floods could further widen the trade deficit by $4 billion and the additional impact on the current account deficit is also estimated in the range of $4 billion to $5 billion.