Rupee's downward spiral continues unabated as it hits 178.19

• Local currency declines by 0.01% owing to the constant supply-side pressure.
• Rupee has depreciated by 13.10% (or Rs20.65) since July 1, 2021.
• A sharp rise in imports resulted in the weakening of the local currency.

KARACHI: Pakistani rupee continued to slide against the US dollar on Tuesday with a fresh decline of 0.01% owing to constant supply-side pressure.

The local currency closed at Rs178.19 against the greenback in the interbank market surpassing Monday’s record low of Rs178.17 due to increased demand from the importers and a lack of sufficient supplies.

The rupee has maintained the downtrend for the past seven months. It has lost 16.79% (or Rs25.62) to date, compared to the 22-month high of Rs152.27 recorded on May 14.

With a fresh decline of 0.01%, the rupee has depreciated by 13.10% (or Rs20.65) since the start of the current fiscal year on July 1, 2021, data released by the central bank revealed.

Earlier, currency dealers linked the rupee’s path with the sixth review of the $6 billion Extended Fund Facility (EFF) for Pakistan that will be taken up by the executive board of the International Monetary Fund (IMF) on January 12.

“The rupee’s path will largely depend on how positive the response the country gets from the IMF board on the sixth review is,” a dealer had said.

According to a report published in The News, the rupee will probably cut some of its losses against the US dollar in the ongoing week ahead of IMF’s sixth review on the loan programme, but it’s likely to stay weak on ballooning trade and current account deficits.

A sharp rise in imports fuelled by global commodity prices and stronger domestic demand widened the trade deficit and resulted in the weakening of the local currency.