business
Thursday Oct 21 2021
By
BDBusiness Desk

Pakistani rupee continues to slide against US dollar

By
BDBusiness Desk
— AFP/File
— AFP/File

  • Local currency settles at Rs173.96 in inter-bank market following fresh depreciation of Rs0.49.
  • With a fresh decline of 0.28%, the rupee has depreciated 10.42% since July 1, 2021.
  • Brokerage houses have revised their estimates for the rupee-dollar parity to Rs176-178 by the end of June 2022.


KARACHI: The Pakistani rupee continued to lose ground and fell to an all-time low of Rs173.96 against the US dollar in the inter-bank market on Thursday following a fresh depreciation of Rs0.49 (or 0.28%).

The local currency closed at Rs173.47 against the US dollar in the inter-bank on Wednesday.

The rupee has maintained the downtrend for the past five months. It has lost 14.24% (or Rs21.69) to date compared to the 22-month high of Rs152.27 recorded in May.

With a fresh decline of 0.28%, the rupee has depreciated 10.42% (or Rs16.42) since the start of the current fiscal year on July 1, 2021, data released by the central bank revealed.

Since global commodity prices have more than doubled over the past few months, brokerage houses have revised their estimates for the rupee-dollar parity to Rs176-178 by the end of June 2022 compared to their early projection of around Rs170.

Rupee trend since October 2020. — AHL
Rupee trend since October 2020. — AHL

The global price hike is expected to keep demand for the US dollar at higher levels in Pakistan to pay for imports.

Analysts see the outlook for the rupee weaker in the near-term as there is an all-round demand coming in from oil and manufacturing importers due to acceleration in the economic recovery and concessionary lending schemes like the temporary economic refinance scheme from the State Bank of Pakistan to foster investment activities even in the tough times of the COVID-19, The News reported.

'Some people benefit when exchange rate increases'

Meanwhile, SBP Governor Reza Baqir said some people suffer losses due to a rise in the exchange rate, but some also benefit from it.

The SBP governor was speaking at a press conference a day earlier, where he said that the devaluation of currency has helped overseas Pakistanis and their families as they are now sending back home more money to their loved ones than before.

"The money sent by our brothers and sisters, the overseas Pakistanis who send their hard-earned money in the form of remittances, is increasing in quantity due to the exchange rate [fluctuation]," he said.

"Some people suffer losses when the exchange rate goes up, but others also benefit from it," he explained.

He said this "additional money" is being sent to Pakistanis in the country, reiterating that every economic policy of the government proves to be beneficial for some, while not for others.

"So when we talk of some people being at a disadvantage [due to economic policies], we should not forget the ones who benefit from them as well," he noted.