Rupee plunged to an all-time low of Rs176.42 against the US dollar in the inter-bank market on Thursday amid a strong demand for the greenback as a higher-than-expected account deficit exerted pressure on the already fragile rupee.
According to the State Bank of Pakistan (SBP), the local currency closed at Rs176.42 against the greenback on Thursday, while it traded at Rs175.48 on Wednesday. It is pertinent to mention that the country reported the highest-ever monthly trade deficit of $5.1 billion during the month of November. The local currency last dropped to a record low of Rs176.20 against the US currency on November 29, says a news report.
The rupee has maintained the downtrend for the past six months. It has lost 15.85% (or Rs24.15) to date, compared to the 22-month high of Rs152.27 recorded on May 14. With a fresh decline of 0.53%, the rupee has depreciated by 11.98% (or Rs18.88) since the start of the current fiscal year on July 1, 2021, data released by the central bank revealed.
According to the Forex Association of Pakistan (FAP), the dollar appreciated by Rs1.35 against the rupee at around 2:15pm to reach a new high in the interbank market against the backdrop of a steep rise in Pakistan’s trade deficit. In the open market, the greenback’s selling rate was recorded at Rs177.50 and buying rate at Rs177 at around 3:40pm.
Exchange Companies Association of Pakistan General Secretary Zafar Paracha attributed the record decline in the rupee’s value to the delay in the arrival of funds from Saudi Arabia as part of a recently revived support package and the country’s rising import bill. FAP President Malik Bostan also held the rising import bill and and widening trade deficit responsible for the dollar’s rise. Saudi Arabia had agreed to revive its financial support to Pakistan, including about $3bn in safe deposits and provision of $1.2bn to $1.5bn worth of oil supplies on deferred payments, in October. The final hurdle in this regard was cleared on November 27 when Prime Minister Imran Khan and his cabinet had approved a pair of summaries for the payment of funds.
