Sunday December 03, 2023

Rupee falls 30pc against dollar in FY22

Rupee closed at 205 on June 30, 2022, while it had ended at 158 to the dollar on the last day of FY2021

By Our Correspondent
July 01, 2022

KARACHI: The rupee posted slight gains against the dollar in last trading session of the 2021/22 fiscal year, pushed by routine import payments and greenback sales by exporters, dealers said.

The local unit closed at 204.85 per dollar on Thursday, stronger than its close of 205.12 on Wednesday in the interbank market. It appreciated by 0.13 percent. In the open market, the domestic currency ended unchanged at 205 to the dollar.

The rupee was down by a sharp 30 percent in FY22 on suspension of International Monetary Fund (IMF) bailout programme, fast deletion in foreign exchange reserves, higher import bill, and US dollar's strength against major currencies. The domestic currency closed at 205 on June 30, 2022, while it had ended at 158 to the dollar on the last day of FY2021.

The currency managed to post gains for a third consecutive session as exporters sold the greenback, a usual occurrence towards the end of each month, but this time, it was attributed to expectations for further appreciation in the exchange rate in coming days, dealers said.

Markets will remain closed on Jul 1 (Friday) because of the bank holiday.

“The market players didn’t want to initiate new positions on the last day of the fiscal year. The players were staying away,” said a currency dealer.

“We expect the rupee to rise further in sessions ahead as underlying sentiment remains bullish on the back of growing hopes for resumption of the IMF programme, although the Fund may release combined tranches of about $1.85 billion by end of July or early August if Pakistan fulfills prior conditions set by the lender to secure the funding,” he added.

Pakistan is in dire need of external financing on the back of falling forex reserves and widening of the current account deficit. The country is also struggling with double-digit inflation.