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Monday July 04, 2022

Dollar soars to Rs208.50 in interbank market

SBP forex reserves drop to the lowest levels since November 2019

By Web Desk
June 17, 2022
A representative image.
A representative image.  

KARACHI: The dollar continued its upward trend to trade at Rs208.50 to a dollar in the interbank market amid increasing uncertainty over the revival of the International Monetary Fund’s loan programme stalled over policy breaches by the previous government.

The local unit lost 0.83 during the intraday trade, Geo News reported Friday.

Investors' fear that Pakistan’s declining reserves will make it difficult for the country to pay for its imports and external debt payments unless the government secures a loan from the IMF has dragged on the rupee, which hit another record low against the dollar on Thursday in a fourth consecutive session of this week.

The State Bank of Pakistan’s foreign exchange reserves have dropped by $241 million or 2.6% to $9.0 billion as of June 10, hitting their lowest level since November 2019.

The strengthening of the US dollar against major world currencies following an aggressive monetary tightening by Fed Reserves to tame-sky-high inflation also hit sentiment on the rupee.

“Falling FX reserves are putting pressure on PKR,” Mohammed Sohail, CEO at Topline Securities said on Thursday after the rupee closed at a fresh all-time low of 207.67 to the dollar in the interbank market.

“IMF staff-level agreement may provide some support to local currency,” Sohail had added.

Worst performers

Pakistan’s currency is one of the worst performers in the world as it has depreciated by 14.57% against the dollar this year, data compiled by Ismail Iqbal Securities showed.

It’s not the rupee that has tumbled and underperformed its regional peers and various global currencies, but other ones are taking a beat. Pak rupee and Japanese yen fell almost equally against the dollar this calendar year to date. The yen declined by 13.34%.

The local unit is one of the 15 currencies that have lost ground.

The Sri Lankan rupee has been the worst-performing, plummeting 43.9%, with the Laotian Kip battering 24%, Turkish Lira 23.18%, and Ghana Cedi 22.33%, respectively, the data revealed.