Another day, another record low for Pakistani rupee

• Value of Pakistani rupee depreciates by 0.01%, pushing the dollar parity rate to an all-time high of Rs178.05.
• News about a widening trade deficit does not sit well with the market.
• Pakistan’s current account deficit edges up to $1.91bn in Nov 2021.

KARACHI: The Pakistani currency on Tuesday recorded a minimal decline of 0.01% against the US dollar due to the widening current account deficit.

News about a widening trade deficit did not sit well with the market and led to a setback for the local currency which remained stable against the US currency a day earlier.

According to data shared by the State Bank of Pakistan (SBP), the depreciation in the value of the Pakistani rupee by 0.01% pushed the dollar to an all-time high of Rs178.05.

Pakistan’s current account deficit — the gap between foreign payments and inflows — edged up to $1.91 billion in November 2021.

Earlier, analysts had predicted that the rupee would likely extend losses in the days ahead as demand from importers for payments and slow inflows from exporters take a toll.

A foreign exchange dealer said: “We anticipate the rupee to remain on the back foot next week, as a decline in the foreign exchange reserves due to rising imports and foreign debt-related outflows remains a drag on sentiment."

It seems that until the end of the month, the demand for hard currency from importers will continue, especially from the energy sector, which will impact the rupee.

“Inflows from exporters remain sluggish as they expect the rupee to depreciate more in the days ahead,” he added.