KARACHI: Pakistani rupee has been on a losing streak against the US dollar in the current fiscal year 2021-22 and has so far shed 4.33 percent of its value (Rs6.82) against the greenback in the interbank market during the last over seven weeks.
The US dollar closed at Rs164.18 on Friday last, the lowest level of the local unit against the greenback since October 05, 2020. The US dollar was at Rs157.36 at the start of the current financial year.
The rupee’s Real Effective Exchange Rate Index (REER) decreased by 0.39 percent in July 2021 to a provisional value of 99.42 from the revised value of 99.81 in June 2021. According to the State Bank of Pakistan, the foreign reserves of the country stood at $24,668.10 million on August 13.
According to experts, the current situation of Afghanistan has a significant impact on the economy of the overall region. Particularly, from the perspective of Pakistan, the situation is quite sensitive, as the US has frozen all the Afghan Central Bank’s assets, while the International Monetary Fund (IMF) has also announced to block SDR allocation worth $460 million.
Hence, Afghans can only buy goods from Khyber Pakhtunkhwa by paying dollars in cash.
However, the rupee is expected to stay stable this week, owing to the inflows from the IMF; however, the recent numbers of the current account deficit may escalate the demand for the dollars. The IMF has announced a $650 billion financial package to boost the global economy. Pakistan is scheduled to get $2.77 billion on Monday (August 23) under this package.
The currency experts expressed the hope that the IMF’s loan amount would ease pressure on the exchange rate. They also said that the declining global commodity and oil prices will also help the local currency make gains.
Analysts at Arif Habib Limited said crashing global commodity prices would ease pressure on the demand for import payments. Further, a decline in infection ratio of the novel coronavirus in Pakistan and slowdown in the global oil prices would release pressure from the external account. – TLTP