KARACHI: Pakistani rupee set another low of 178.17 against the US dollar on Monday, the 12th lowest level set in December.
According to the State Bank of Pakistan, the dollar opened at Rs178.13 in the interbank market and closed at Rs178.17 (-0.02). Within the open market, the rupee was traded at 178.30/179.30 per dollar.
Overall, the rupee has shed Rs2.45 against the US dollar during the current month. The rupee has depreciated by Rs20.75 during the ongoing fiscal year 2021-22 and Rs18.02 in the current year 2021.
The currency dealers said that the demand for the dollars remained high in the market as the market opened after two weekly holidays. They said that the dollar’s demand for import and corporate payments remains usually high by the close of a calendar year. They say that foreign entities operating in Pakistan send their profits and dividends to their parent companies abroad by the end of the quarter.
According to experts, the recent depreciation of the local unit is dictated by the International Monetary Fund (IMF) through prior actions and it has nothing to do with macroeconomic fundamentals. They say that there is a complete breakdown of economic policymaking as the country’s fiscal policy has become subservient to monetary and exchange rate policies.
They said that pressure has mounted on the rupee in recent weeks, with everything now hinging on whether the government strikes a deal with the IMF over the release of new funds. To land the deal, a mini-budget is due in coming days, which will presumably pave the way for an IMF agreement and the release of funds. It is expected to give the rupee some respite.
Earlier during this month, the rupee set 11 lowest ever levels against the US dollar. The dollar hit then highest ever levels of Rs178.15 on December 22, Rs178.05 on December 21, Rs178.04 on December 17, Rs177.98 on December 15, Rs177.89 on December 13, Rs177.71 on December 10, Rs177.61 on December 9, Rs177.43 on December 8, Rs176.79 on December 7, Rs176.77 on December 3, and Rs176.42 on December 02. – TLTP