Friday Apr 01, 2022
KARACHI: Amid the ongoing political uncertainty, the Pakistani currency maintained a record-breaking downward streak for the 14th consecutive day on Friday, as it slipped below 184 for the first time in the history of Pakistan, dropping to a new all-time low at Rs184.09 against the US dollar in the inter-bank market.
The rupee has maintained its record-breaking downward movement for the 14th consecutive working day, except Thursday (March 24) when it closed flat on a day-on-day basis. The currency has cumulatively lost 2.86% (or Rs5.1) in the past 14 days from Rs178.98 on March 14.
Since the beginning of the current fiscal year, the rupee has dropped a massive 16.85% (or Rs26.55) as compared to the previous fiscal year’s close at Rs157.54 on June 30, 2021. The Pakistani rupee has maintained its slump mainly because the US dollar is gaining strength against other major global currencies for the past few days.
Meanwhile, the rupee has maintained a downtrend for the past 12 months. It has lost 20.89% (or Rs31.82) to date, compared to the 22-month high of Rs152.27 recorded in May 2021.
Currency dealers said that the rupee depreciated on the back of the settlement of the heavy fine for the Reko Diq project as well as foreign debt payments.
“Prevailing political uncertainty in the country is also adversely impacting the rupee value against the dollar as it has created negative sentiments for the local unit against the dollar,” they said.
Earlier, speaking to Geo.tv, Arif Habib Limited Head of Research Tahir Abbas said that the political uncertainty is taking a toll on the currency.
“Political uncertainty is taking a toll on the financial markets of Pakistan,” he said, adding that the pressure on the country’s foreign exchange reserves pushed by the draining of dollars from stocks and government securities (like T-Bills) has also played havoc with the rupee value.
A day earlier, the foreign exchange reserves held by the State Bank of Pakistan (SBP) declined 19.48% on a weekly basis.
On March 25, the foreign currency reserves held by the SBP were recorded at $12,047.3 million, down $2,915 million compared with $14,962.4 million on March 18.
According to the central bank, this decline reflects repayment of external debt, including repayment of a major syndicated loan facility from China.
"The rollover of this syndicated facility is being processed and is expected shortly," the central bank said.
Overall liquid foreign currency reserves held by the country, including net reserves held by banks other than the SBP, stood at $18,554.5 million. Net reserves held by banks amounted to $6,507.2 million.
According to Arif Habib Limited, total reserves dropped to its lowest level since June 26, 2020; while SBP reserves dropped to its lowest level since October 9, 2020.