Monday February 26, 2024

Rupee plumbs to fresh low

By Our Correspondent
June 16, 2022

KARACHI: Rupee hit record lows for the third-consecutive session on Wednesday amid strong dollar demand for import payments, and investor worries over deteriorating balance of payments spurred by uncertainty about resumption of IMF loan programme.

The rupee ended at an all-time low of 206.46 against the dollar in the interbank market. It lost 0.63 percent of its value against the greenback. In Tuesday trade, the rupee finished at 205.16 against the dollar.

“There was fiscal year-end seasonal demand from importers and the foreign companies seeking to repatriate profits to their headquarters abroad,” said a currency dealer. “Higher global oil prices and falling forex reserves due to absence of foreign currency inflows from the IMF and other bilateral and multilateral lenders continued to push the rupee lower,” he added.

Reports that China has agreed to roll over a $2.3 billion loan to Pakistan and extend additional assistance between $2.5 and $2.8 billion in a bid to help stabilise the country’s forex reserves did not lift the market sentiment.

The rupee closed at a historic low of 208 per dollar in the open market. It settled at 206.50 in the previous session. The local currency declined by1.50 rupees on a day-on-day basis. Zafar Paracha, the general secretary of the Exchange Companies Association of Pakistan said the reason for the recent bout of currency depreciation was difficult to understand.

“The rupee has been seesawing for the last few weeks and it seems the government is not concerned about the currency’s fall to record lows. The government and the central bank should warn traders against speculation,” Paracha added. “There is nominal demand for the greenback in the open market and the exchange companies are selling 99 percent of their dollar stocks to the interbank market,” he said.