Rupee hits new record low against US dollar

• Local currency depreciates around 0.11% against the greenback on Wednesday.
• Since May 14, the rupee has cumulatively lost 11.06%.
• "I don’t think the local currency will depreciate further it would either consolidate or appreciate, going forward," says Tahir Abbas.

KARACHI: The rupee extended losses on Thursday, hitting fresh record lows against the US dollar, in the inter-bank market driven by concerns on the macro level.

The rupee lost 18 paisas or 0.11% to close at Rs169.12 against the greenback in the inter-bank market, according to the data released by the State Bank of Pakistan.

The Pakistan currency fell to Rs169.63 in intra-day trading in the inter-bank market.

The currency has maintained the downturn since touching a 22-month high of Rs152.27 on May 14, 2021, losing a cumulative 11.06% (or Rs16.85) in the past four months.

Speaking to Geo.tv, Arif Habib Limited Head of Research Tahir Abbas said: “Demand for the US dollar has slightly increased as the prices of commodities in the international markets have increased significantly due to which the there is an additional outflow.”

The analyst further added that uncertainty regarding trade with Afghanistan and increasing petroleum-related imports — keeping in view the rising price of oil in the international market — has added fuel to the already depreciating currency.

However, the analyst believes that this is the “maximum range. I don’t think the local currency will depreciate further it would either consolidate or appreciate, going forward.”

On technical grounds, Abbas said he believes that the real effective exchange rate (REER), which is currently around 96-97 points, suggested that there was no room left for a further drop in the rupee value “as the rupee has already been undervalued.”

According to Bloomberg, Pakistan’s central bank likely intervened in the foreign exchange market to limit losses in the rupee that fell to a new record low.

There are indications of the central bank selling the US dollar to curb the rupee losses, according to traders.