Dollar upsurge against rupee continues

• Rupee settles at Rs174 in the inter-bank market against the US dollar following fresh depreciation of 0.02%.
• With a fresh decline of 0.02%, the rupee has depreciated 10.44% since July 1, 2021.
• Foreign currency reserves held by the SBP were recorded at $17,492.2 million.

KARACHI: The upsurge of the US dollar against the rupee continued on Friday with the local currency losing 0.02% compared to the previous close on the back of higher demand due to import payments.

The US currency closed at an all-time high against the Pakistan rupee on Friday, settling at Rs174 in the inter-bank market compared to Rs173.96 recorded on Thursday.

The rupee has maintained the downtrend for the past five months. It has lost 14.27% (or Rs21.73) to date compared to the 22-month high of Rs152.27 recorded in May.

With a fresh decline of 0.02%, the rupee has depreciated 10.44% (or Rs16.46) since the start of the current fiscal year on July 1, 2021, data released by the central bank revealed.

Economists say that the main reason for the rise in the value of the US dollar and the depreciation of the rupee is Pakistan's current account deficit — which clocked in at $1.11 billion in September — and the International Monetary Fund's demand for further devaluation of the rupee.

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.

Meanwhile, the foreign exchange reserves held by the central bank also dropped by 8.6% on a weekly basis, according to data released by the State Bank of Pakistan (SBP).

On October 15, the foreign currency reserves held by the SBP were recorded at $17,492.2 million, down $1.65 billion compared with $19,138.4 million on October 8.

According to the central bank, the decrease came on the back of external debt repayment that included repayment of $1 billion against Pakistan International Sukuk.

Overall liquid foreign currency reserves held by the country, including net reserves held by banks other than the SBP, stood at $24,327.4 million. While net reserves held by banks amounted to $6,835.2 million.