Aaj.tv Logo

Pakistan's rupee weakened further against the US dollar to close near its historic low after another round of depreciation in the inter-bank market on Friday.

As per the State Bank of Pakistan (SBP), the PKR finished at 175.46 against the USD after a day-on-day depreciation of 48 paisas or 0.27%. On Thursday, the rupee had closed at 174.98 against the dollar in the inter-bank market.

Its all-time low against the US dollar (closing rate) is 175.73, which it hit on November 12, 2021.

Reports suggest the rupee crossed even the 176 level in intra-day trading on Friday.

The fall comes despite a staff-level agreement reached between Pakistani authorities and the International Monetary Fund (IMF) earlier this week.

Pakistan's rupee registers minor gain against US dollar

However, the decline in SBP's net reserves by $691.3 million to $16.254 billion has dented investor confidence, said Head of Research at Arif Habib Limited Tahir Abbas.

Total liquid foreign reserves held by the country stood at $22.77 billion on November 19, 2021, stated the SBP on Thursday. Net foreign reserves held by commercial banks stood at $6.519 billion, while SBP’s reserves decreased mainly due to external debt repayment.

“The current account deficit has also increased. The market is waiting for the release of multi-billion dollars funding from Saudi Arabia, which is leading to volatility," Abbas told Business Recorder.

Pakistan’s current account deficit widened to $1.66 billion in October 2021 from a surplus of $448 million recorded in the same month last year. On a monthly basis, CAD widened 46% as compared to $1.13 billion recorded in the previous month (September 2021).

Abbas pointed out that commodity prices have started to come down, and could have a positive impact on curtailing Pakistan’s import bill. This, in turn, would reduce the current account deficit and ease pressure on the rupee.

Meanwhile, Adviser to PM on Finance and Revenue Shaukat Tarin also once again warned speculators that Pakistan's rupee would reverse its downward course amid measures taken by the government.

Tarin warns 'speculators', says rupee will reverse direction.

This article was first published in Business Recorder on Nov 26, 2021.