Rupee continues to be on slippery ground, hits new historic low of 177.43

• Currency declines as demand for foreign currency stands higher compared to its supply in the wake of an increase in import payments.
• With a fresh decline of 0.36%, the rupee has depreciated by 12.62% since July 1, 2021.
• Deposits worth $3bn fail to soothe the nerves of the market.

KARACHI: There was no respite from the declining rupee as Pakistani currency hit a new all-time low of Rs177.43 against the US dollar in the inter-bank market on Wednesday as demand for the foreign currency stood higher compared to its supply in the wake of an increase in import payments.

According to the data released by the State Bank of Pakistan, the local currency closed at Rs176.79 against the greenback on Tuesday.

The rupee has maintained the downtrend for the past seven months. It has lost 16.52% (or Rs25.16) to date, compared to the 22-month high of Rs152.27 recorded on May 14.

With a fresh decline of 0.36%, the rupee has depreciated by 12.62% (or Rs19.89) since the start of the current fiscal year on July 1, 2021, data released by the central bank revealed.

Saudi Arabia on weekend deposited $3 billion in Pakistan's central bank under its economic support package. These inflows have boosted the country’s foreign currency reserves to $25 billion and those of the State Bank’s reserves increased to $19 billion. 

Though, these reserves would reflect on the forex reserves’ data to be issued later this week. However, the funding failed to soothe the nerves of the market.

Earlier, speaking to Geo.tv, Arif Habib Limited Head of Research Tahir Abbas had said that the currency is depreciating on the back of a historic high import bill and the anticipation that the current account deficit will clock in within a range of $2-2.5 billion.

It is pertinent to mention here that despite receipt of Saudi funds worth $3 billion the currency is depreciating because of $7.7 billion imports in November.

"Going forward, the local currency is expected to recover in the months to come after the release of funds from the International Monetary Fund (IMF) and World Bank in January," he had said.

Abbas had highlighted that the impact of reducing oil prices in the international markets and the measures taken by the government to reduce the imports will be prominent in a month or two.

Therefore, he had predicted that the local currency "will trade in a range of Rs175-177 against the greenback till the end of the calendar year 2021."