Pakistani rupee continued setting all-time new lows against the US dollar for the fifth consecutive session, with the local currency falling to 174.43 on Monday amid delay in resumption of $6 billion Extended Fund Facility (EFF) by the International Monetary Fund (IMF).
According to the State Bank of Pakistan, the rupee shed Rs0.43 (-0.25 percent) as the US dollar opened at Rs174 and closed at Rs174.43. Within the open market, the rupee was traded at 174/ 175 per dollar.
The Pakistani rupee shed Rs3.25 during the last five sessions against the US dollar, while depreciation during the fiscal year 2021-22 has been Rs17.01. The local unit has shed Rs14.16 against the US dollar in the current year 2021. The local currency has maintained a downtrend after it touched 22-month high of Rs152.48 in May 2021, losing a cumulative Rs22.12 in the past five months to date.
Currency experts attributed the high dollar demand to opening of the market after two weekly holidays. They further said that the massive external payments of imports and debt repayment by the State Bank of Pakistan (SBP) have also put pressure on dollar demand.
The official foreign exchange reserves of the State Bank recorded a decline of $1.646 billion to $17.492 billion by the week ended October 15, 2021 as compared with $19.138 billion by the week ended October 08, 2021. The SBP attributed the decline in foreign exchange reserves to external debt repayment, which included repayment of $1 billion against Pakistan International Sukuk.
Furthermore, the current account deficit ballooned to $3.4 billion during July–September 2021 as compared with a surplus of $865 million in the corresponding period of the last fiscal year. This factor also put a pressure on the local currency.
Though the central bank has taken a number of steps to ease the pressure on the exchange rate since August, the local currency continues to fall against the US dollar and these measures have miserably failed to produce any positive results.