Rupee falls 5.7pc against dollar in inter bank trade

Shahid Iqbal Published July 16, 2018

The Pakistani rupee lost 5.7 per cent of its value against the US dollar in inter bank trading on Monday, with the greenback being traded at Rs128.50 in the market towards day's close.

Meanwhile, the selling rate in the open market climbed up to Rs130 while the greenback remained short in supply.

On Saturday, State Bank of Pakistan (SBP) Governor Tariq Bajwa had denied any move for devaluation. On the same day, caretaker Finance Minister Shamshad Akhtar had stated that the preparations to approach the International Monetary Fund (IMF) were underway.

While talking to Dawn today, Malik Bostan, one of the largest currency traders in the country, stated: "Devaluation has never helped external deficits. With each devaluation, the deficits grow faster still."

He added that the law and order situation in the country needs to improve and warned "Pakistan is sinking into quicksand."

"Borrowing is the only way out and IMF and China are the only two options," he stated.

Expressing his fears for the future of the country's weakening economy, he said that he hoped China or IMF would help provide stability "otherwise, the risks are very serious".

The rupee's value against the dollar has been depreciating since the government, in talks with the IMF, decided to devalue the currency.

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Shahid Iqbal is a reporter for Dawn based in Karachi with 38 years of experience covering politics and economics. His career includes seven years with the Japanese newspaper Asahi Shimbun, as well as roles at United Press International (UPI) and AFP.

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Ahmed Mir

Jul 16, 2018 05:47pm

Worst is yet to come.

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Anti-Corruption_Pakistani

Jul 16, 2018 05:58pm

The solution of our current political and financial crisis is get all looted money back from NS, Asif Zardari and their cronies and pay back our debts, and the rensing spend on building new schools, dams, hospitals and provide clean water and job opportunities on merits yo all citizens. There is no other solution, corrupt mafia ginancially criplled our country and must be punished for their evil and selfish acts!

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Shahid khan

Jul 16, 2018 06:04pm

The currency will devalue into the 135-140 range per dollar and if it crosses 150 we are going to see a default .

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Dr. Salaria, Aamir Ahmad

Jul 16, 2018 06:14pm

Bad news for the hard-working, honest, truthful, dedicated and patriotic people of the Islamic Republic of Pakistan.

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Syed

Jul 16, 2018 06:15pm

Results of NS mismanaged and corrupt government.

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Jul 16, 2018 06:19pm

Its a grave situation. Rs may hit 150/Dollar soon

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Jiyalo Wadero

Jul 16, 2018 06:49pm

It is a known fact that political instability in the country always affects the currency of the country.Don't be surprised if dollar hits Rs.140.in the Exchange Market.

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Maria enteparia onnuchoriu

Jul 16, 2018 07:04pm

This is a calm before the storm, be prepared.

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Abdullah Masood

Jul 16, 2018 07:20pm

To all those, who are still planning to vote PML-N.

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bimal william

Jul 16, 2018 07:37pm

It signals very very tough days ahead specially for common n poor Pakistanis. At this point of time Pakistan needs a very honest, educated and professional finance minister who can take some really tough decisions in the best interest of the country. So the new elected govt must be very careful while choosing new fin. minister.

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HAK

Jul 16, 2018 08:04pm

Now Ishaq Dar ought to come back and explain the result of his exceptional, acute, shrewd, and far-sighted economic policies; maybe there is something or some silver lining the whole nation is oblivious to comprehend about the economy of Pakistan which the PML-N is so cognizant about.

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Asifnaqvi

Jul 16, 2018 08:38pm

That's what happens when you keep printing currency notes without depositing equal gold to your central bank reserve. When was the last time you heard of a Pakistani gov purchasing gold from the international market? In recent times, rise or surge of international gold rates($/troy ounce) have been observed with india and china as buyers.

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Alba

Jul 16, 2018 08:53pm

Part of the rupee's problem is the strength of the dollar. The US dollar is strong across all currencies reflecting the strengthening US economy. The weakness of the rupee is not all there is to it. The dollars is a benchmark. What if the Pound Sterling was the benchmark. In 1900 the Pound Sterling was the world's reserve currency. Having a reserve currency helps countries trade. The dollar has a know value. Traders are more reluctant to accept currencies under pressure. The Swiss franc has a higher value than the dollar but it is not the world's reserve currency for that reason.

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Majnu

Jul 16, 2018 09:03pm

"Borrowing is the only way out and IMF and China are the only two options," It is a scary situation for Pakistan.

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Satya Jeet

Jul 16, 2018 09:33pm

CPEC is not Game Changer. CPEC is Grave Danger.

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Khurram

Jul 16, 2018 10:16pm

By the time next government comes, nothing will be left.

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Jul 16, 2018 10:56pm

It will touch 150 by end of October. Country is in deep trouble.

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santosh v.joshi

Jul 16, 2018 10:58pm

bad news

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NASR

Jul 16, 2018 11:02pm

What is going on? Everyone in the government can you please look into this? After all where are we heading for? I cannot recall this volatility in the history of Pakistan"s economy. Do we not know of the dire consequences this will bring?

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Baasil

Jul 17, 2018 12:28am

This is what years of Ishaq Dar does to Pakistan.

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ajmal

Jul 17, 2018 01:42am

Time for Pakistan to improve the economy

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Javed Arshad

Jul 17, 2018 02:23am

PPP and NS and their able FM’s never did a serious job except building up a mountain of debt, for the last year or two it’s only Panama and its aftermath and beyond self inflicted damage, enemy at work. Hope it does not get worse than this before it gets better. Those responsible must be brought to justice and the looted money brought back to Pakistan.

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Ammar

Jul 17, 2018 02:34am

Is there anyway PKR can bounce back from 129 and regain its 120 - 122 value?

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M Mirza

Jul 17, 2018 04:09am

What are they doing to stop the fall?. Any import restrictions. Nobody shoud be alowed to take money out of Pakistan

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Khalid

Jul 17, 2018 04:50am

He added that the law and order situation in the country needs to improve and warned "Pakistan is sinking into quicksand." "Borrowing is the only way out and IMF and China are the only two options," he stated. Expressing his fears for the future of the country's weakening economy, he said that he hoped China or IMF would help provide stability "otherwise, the risks are very serious". - The fall is too deep, hope it survives.

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Uday Kulkarni

Jul 17, 2018 05:14am

I am not in full agreement with Malik Bostan saying that "Devaluation has never helped external deficits. With each devaluation, the deficits grow faster still." While the statement may be partially making sense; the main issues Pakistan's economy faces are currency deficit and imbalance of import/exports which is worsening the situation with each passing day. The only way to check the imbalance is increase in exports which will increase with devaluation ONLY unless government were to pump in sops for the industry by generating revenues from additional taxes which does not seems to be a possibility now given the high spending situation due to elections and shallow coffers. Thus additional revenues could be generated only by devaluation from increased export viability & bring favourable currency deficit situation.

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Goodwill

Jul 17, 2018 06:40am

Can some one please tell me who is to be blamed for this situation?

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Babu

Jul 17, 2018 07:37am

Ask pmln how we've come to this? Ask Abbasi how we've come to this? Ask nawaz how we've come to this? Ask zardari how we've come to this?

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Bharat

Jul 17, 2018 11:50am

Very soon it will hit 200

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Mirza Baig"

Jul 17, 2018 05:55pm

"Out of the Box thinking is needed for political, economic and social restructure of Pakistan at this time...

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Uday Kulkarni

Jul 18, 2018 06:12am

@Dr. Salaria, Aamir Ahmad - I agree 100 % with you,the situation in Pakistan is going to be hard for honest people. The poor will have to work even harder to be able to afford quality goods or even maintain their existing standard of living with constant devaluation of currency which seems inevitable leading to rise in prices of all imported goods

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tango

Jul 18, 2018 10:05am

@Mirza Baig" very good best comment

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Khan

Jul 18, 2018 11:06am

How far this political hate game will go and keep hurting Pakistan.

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Chetan

Jul 18, 2018 12:47pm

Improving relationship and Trading with India will help your economy many folds.

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krishna

Jul 18, 2018 01:18pm

@Asifnaqvi : Is dollar printed against any gold or other standards ?

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Imtiaz Ali Khan

Jul 18, 2018 04:25pm

@Anti-Corruption_Pakistani yes lock them up behind bars and give them punishment until they cough up the money, no more good treatment of these goons and killers.

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