There was no respite from the rupee’s decline on Thursday as the currency fell to a new all-time low of Rs176.42 against the US dollar due to a gigantic import bill for November and a widening of the current account deficit.
According to the State Bank of Pakistan (SBP), the rupee closed at 175.48 rupees on Wednesday.
A report from Arif Habib Limited said the rupee fell 0.54% overnight as it fell 13.68% since peaking at Rs 152.28 on May 14 2021.
On top of that, according to the report, the rupee has depreciated 10.7% since the start of the current fiscal year on July 1.
Talk to L’Express Tribune, Ismail Iqbal Securities, head of research, Fahad Rauf, said the high import figure has caused the rupee to fall.
“According to unofficial reports, imports to Pakistan are expected to reach an all-time high of $ 8 billion in November, which will widen the current account deficit to a record $ 2.5 billion,” he said. . “This forecast put pressure on the rupee, which lost more ground.”
Echoing Rauf’s views, Arif Habib Commodities CEO and Managing Director Ahsan Mehanti said the government’s failure to halt import growth had weakened the rupee.
Read Rupee slips to new low as deficit widens
On the other hand, the State Bank of Pakistan and the Saudi Development Fund have signed an agreement for the deposit of $ 3 billion in the central bank of Pakistan, but so far the amount has not been received, he said.
“Amid the delay, Pakistan is set to report massive current account and trade deficits, which will haunt the rupee,” he said.
Inter Market Securities research director Saad Ali said the lack of news regarding the receipt of a $ 3 billion loan from Saudi Arabia and the next loan tranche from the International Monetary Fund ( IMF) shook market sentiment.
“Not just in the forex market sentiment is also fragile in the equity market,” he said.
In addition, the government’s inability to contain imports despite monetary tightening and the depreciation of the rupee has raised public concern, he said.
Posted in The Express Tribune, December 3e, 2021.