The Pakistani Rupee continues to fall against the dollar
The Pakistani rupee continued to decline against the US dollar on the interbank market on Tuesday, gaining 1 rupee to close at 217.65 rupees.
However, on the open market, it increased by Rs 3 and is currently trading around Rs 223.
During Tuesday’s intraday trading on the interbank market, the Pakistani rupee continued to lose momentum against the U.S. dollar, as the country suffers from a currency shortage.
Pakistani Rupee traded against Dollar
The local Pakistani rupee was trading at 217.70 against the U.S. dollar after losing 1.05 due to a currency crunch, which analysts attributed to the United Arab Emirates’ new regulations, smuggling, and the relaxation of the import embargo.
The UAE has mandated that Pakistani travelers report 5,000 dirhams at the airport upon arrival, resulting in a spike in the open market price of the US dollar.
Dr. Khaqan Hassan Najeeb, an economist and former consultant to the federal ministry of finance, stated that the rupee is falling not just due to the worldwide strengthening of the dollar but also due to recent political events, which are producing market anxieties.
He also highlighted the State Bank of Pakistan’s (SBP) diminishing foreign reserves as a reason for the decline. The current foreign exchange reserves amount to $7.8 billion, which is insufficient to cover imports for more than a month.
General-Secretary of the Exchange Companies Association of Pakistan (ECAP) Zafar Paracha told Arab News that the local unit’s decline was caused, in part, by its smuggling into Afghanistan, where sellers receive better rates.
In addition, the decision of the government to ease the prohibition on the import of non-essential and luxury products in order to comply with an International Monetary Fund (IMF) requirement is steadily increasing the pressure on the rupee.
The prohibition was lifted prior to the August 29 meeting of the Fund’s executive board in Washington, where Pakistan’s proposal to resume its lending program will be discussed.
The market does not appear to have responded to the introduction of Qatari funds.
During a briefing, Deputy Governor of the State Bank of Pakistan (SBP) Murtaza Syed stated that Qatar will provide $2 billion, Saudi Arabia will provide $1 billion, and the United Arab Emirates will contribute the same amount.
