- Local currency depreciates around 0.21% against the greenback on Thursday.
- Since May 14, the rupee has cumulatively lost 11%.
- “Pressure [on currency] built up owing to higher imports and dollar outflows to Afghanistan in the past,” says finance minister.
KARACHI: Owing to concerns on the macro level, the Pakistani rupee closed yet again near its all-time low against the US dollar on Thursday.
The rupee lost 35 paisas (0.21%) to close at Rs169.03 against the greenback in the inter-bank market, according to data released by the State Bank of Pakistan (SBP).
Last week, the currency had dropped to an all-time low of Rs169.12 against the US dollar.
The currency has maintained a downtrend since May 14, 2021 — when it touched a 22-month high of Rs152.27 — and has lost a cumulative 11% (or Rs16.76) in the past four months.
On Wednesday, Finance Minister Shaukat Tareen cited rising oil prices and the import of vehicles as major reasons behind the depreciation in the value of the rupee.
He said: “Pressures have built up owing to higher imports as oil and LNG prices increased significantly in six months, automobile imports, dollar outflows to Afghanistan instead of inflows in the past and perceptions that speculators and importers also exploited.”
However, the real effective exchange rate (REER) was almost close to market rate with an about Rs2 per dollar difference.
It is pertinent to mention here that the central bank in its Monetary Policy Statement — released earlier this week — had noted that the flexible market-based exchange rate regime has performed well since its introduction in June 2019, including through the COVID shock.
“Since its flotation, the rupee has moved in an orderly manner in both directions and has depreciated by only 4.8% since July 27, much less than many other emerging market currencies over the same period,” it argued.