Pakistani Rupee Falls, Dollar Touches 189 Mark
On Thursday, the rupee depreciated at considerable rates against the dollar. This was another major setback for the currency one that has been dropping continuously since mid-March. While one rupee would have bought a dollar on March 4, it’s now at Rs189 (as of publication). The rupee’s devaluation is largely attributed to market instability and political uncertainty in the country. The Pakistani rupee had fallen 10% against the dollar in the past month.
Today, it broke all records to sell at a record low of Rs189 against the US dollar in the interbank market. This has occurred due to current political instability.
The rupee is down 19.44% since the start of the current fiscal year on July 1, and it’s going to stay down. With a new decline of 1.09%, the Pakistani rupee has depreciated by 19.44%. While traders have been directly contributing to this fall by encouraging importers to make quick and unnecessary purchases.
The value of the local currency has been rapidly decreasing for almost one year because of a widening trade deficit, current political instability, high inflation, and low foreign reserves. Previously, the government has worked with the State Bank of Pakistan (SBP) to ensure that inflation does not rise due to these changes.
It reported that Pakistan’s demand for the next four to five months is approximately $13 billion. However, due to the ongoing economic and political crisis, it’s “difficult” to meet the demands. Others currency dealers think the latest round of depreciation occurred after the political crisis intensified in the country. It has also caused difficulties for importers when they had to arrange money in dollars to pay for their purchases.
However, the State Bank of Pakistan has remained silent about the exchange rate situation. In times of currency depreciation, traders’ guidance triggers panic buying in the market.
