Rupee loses another Rs1.14 viz US dollar

KARACHI: Pakistani rupee continued on its downward trajectory against the US dollar for the 17th session in a row amid political turmoil and fall in foreign exchange reserves of the country, and plummeted to fresh all-time low of 185.23 on Tuesday.
The State Bank of Pakistan said in a statement that the dollar opened at Rs184.09 in the interbank market and closed at Rs185.23 after shedding Rs1.14 (-0.62 percent). The rupee witnessed a trading range of 115 paisas during the session, showing the intra-day high bid of 185.40 and low offer of 184.25. Within the open market, the rupee was traded at 185.50/186.50 per dollar against 184.50/185.50 a day earlier.
On the other hand, the US Dollar Index, which gauges the greenback against a basket of its main competitors, faced some downside pressure on Tuesday after rising for three straight days and went down 0.09 percent to 98 89. In the meantime, US yields resume the upside albeit at a gradual pace amidst increasing cautiousness among investors following the recent inversion of the US yield curve.
The rupee has set 16 all-time lowest levels in the interbank market against the greenback during the last 18 sessions. Overall, the rupee shed Rs2.31 against the US dollar during the last week, while the local unit devalued by Rs27.80 during the ongoing fiscal year 2021-22 and Rs8.78 during the current year 2022.
According to currency dealers, the demand for the dollar remained high as the market opened after three days. They said that political instability in the country, lingering talks with the International Monetary Fund (IMF) and higher commodity prices in the global market have badly hit the stability of the rupee in the interbank. They said that political uncertainty has created a negative sentiment overall for the economy and this has been negatively impacting the rupee value against the dollar.
They also attributed import payments as a factor contributing to fall of the rupee. They said the pressure on the country’s foreign exchange reserves pushed by draining of dollars from stocks and government securities has also played havoc with the rupee value.
The SBP reported last week that foreign exchange reserves of the country dropped by $2.9 billion (13.48 percent) on a week-on-week basis to reach $18.55 billion. According to the SBP data, the foreign exchange reserves held by the central bank decreased to $12,047.3 million, down by $2,915 million on repayment of external debt, while net reserves held by commercial banks amounted to $6,507.2 million. The falling reserves are sufficient to cover the import bill for only two months. – TLTP