KARACHI: Amid pressures for further devaluation by the exporters, Pakistani rupee is the weakest in region, 58pc cheaper than Indian currency and 24pc than Bangladeshi taka.
Devaluation of Chinese yuan by almost 2pc in mid-Aug triggered the depreciation of currencies especially in Far-Eastern region. The Indian rupee was devalued by 1.5pc. Since July 1, 2015 Pakistani rupee dipped by 3.5pc against the dollar.
The Indian rupee is the strongest in region, as it was devalued to 67 per dollar from 65 in January 2015.
Though, the taka drastically fell by 13.3pc against the greenback this year but it is still in better shape, as the currency is available at 85 per dollar compared to 75 taka in January 2015.
“For 100 taka at least 117 Pakistani rupees are required in the local market,” said Anwar Jamal, a currency dealer in the open market.
The local currency was stable at Rs101.40 in January 2015; however, since then it has been depreciated by 4.14pc.
Currency experts believe that market requires no further devaluation. There is a balance in supply and demand which determines the exchange rate.
“If the market is set free, there would be no much difference in the exchange rate,” said Atif Ahmed, a currency expert and dealer in the inter-bank market.
However, some economists recently suggest that the local currency is overvalued that requires correction to boost exports. This slogan of overvaluation has resulted into a rush for buying dollars and pushed the price over Rs106 in open market on Saturday.
“General public should not attend the rumours about devaluation of rupee against dollar and refrain from purchasing the greenback,” said Zafar Paracha, General Secretary of Exchange Companies Association of Pakistan.
The country has record foreign exchange reserves (around $20bn), remittances increasing by 12-15pc each month and current account deficit is at the lowest side but still the rupee shows weakness.
“Devaluation is the need of exporters not the market,” Ahmed said, adding that the poor foreign investment portrays a negative picture that weakens confidence over the local currency.
Published in Dawn, November 8th, 2015
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