Rupee depreciates 51 paisas to a record low against US dollar

• Local currency closes at Rs169.6 against the greenback on Monday.
• The rupee has cumulatively shed 11.38% since May 14.
• Samiullah Tariq says "Due to higher commodity prices [...] and uncertain situation in Afghanistan, demand for US dollar is higher than supply."

KARACHI: The Pakistani currency failed to continue its stability phase as it lost Rs0.51 and closed at an all-time low of Rs169.6 against the US dollar in the inter-bank market on Monday.

According to the data released by the State Bank of Pakistan (SBP), the currency last touched a record low of Rs169.12 on September 15.

The local currency is depreciating due to an increase in demand for dollars, as imports are surging.

With a fresh fall of 0.31%, the rupee has cumulatively shed 11.38% (or Rs17.33) since its recent high of Rs152.27 recorded on May 14.

Meanwhile, the currency lost around 7.65% or Rs12.06 since June 2021.

Speaking to Geo.tv, Pakistan-Kuwait Investment Company Head of Research Samiullah Tariq said: "Due to higher commodity prices, supply chain bottlenecks and uncertain situation in Afghanistan, demand for US dollar is higher than supply."

The analyst was of the view that as the central bank is following a flexible exchange rate, "exchange rate parity is going in favour of the US currency due to higher demand."

It is pertinent to mention here that the SBP had adopted a flexible market-based exchange rate regime in 2019.

Earlier, foreign exchange experts had predicted that the Pakistani rupee would break the all-time low closing record of 169.12 per dollar this week and will trade in a range.