Tuesday October 04, 2022

Rupee inches close to historic low

By Our Correspondent
September 23, 2022

KARACHI: The rupee edged lower against the dollar in the interbank market on Thursday, tracking pressure of import payments and appreciation of the US dollar against major currencies.

The local unit closed at 239.71 per dollar, compared with Wednesday’s close of 239.65. It fell by 0.03 percent on day on day basis.

In the open market, the domestic currency lost 50 paisas to end at 244.90 against the dollar.

The rupee has plunged to an all-time low of 239.94 versus the dollar on July 28 this year.

Dealers predicted that the rupee would set a new record low, but positive news about foreign inflows helped the currency avoid a major fall.

According to a currency dealer, the rupee was prevented from reaching a record low versus the dollar by the World Bank's promise of $850 million in immediate assistance for flood relief efforts and the rehabilitation of millions of people.

In days ahead, "The rupee is likely to recover or stay flat at the current levels," he envisaged.

The government has been compelled to import vegetables, grains, and cotton to replace damaged crops as a result of the floods, and long with higher debt servicing, has created a substantial outflow of dollars, which has sent the rupee into a downward spiral.

The import bill has been put under even more stress as a result, and there have been reports of persistent dollar outflows through unofficial channels, mainly through the Afghan border.

The appreciation of the US dollar against the major currencies also put pressure on the rupee.