KARACHI: The rupee continued its slide against the dollar on Friday with the international currency hitting an all-time high of Rs192.53 in the interbank market.
According to the State Bank of Pakistan (SBP), the rupee lost 0.39 per cent or 76 paisa against the dollar on a day-on-day basis. The Pakistani currency has depreciated 8.32pc since the beginning of 2022.
The drop in the rupee’s value against the greenback has been 20.9pc since its 2021 high recorded on May 14. Since the beginning of the current fiscal year on July 1, 2021, the rupee has lost 18.17pc value against the dollar.
The unrelenting rise in the exchange rate has already rattled the economy. The decline in the rupee is mainly because of an uncontrolled increase in imports coupled with a relatively slower pace of growth in exports. This is reflected in the trade deficit, which reached $39 billion in July-April.
Foreign exchange reserves of the central bank have touched $10.3 billion, lowest since June 2020. The import cover, which shows the ability of a country to pay for its foreign purchases in the international currency, is now down to a meagre 1.54 months.
Currency dealers say higher demand for dollars is the key reason for the bullish trend in the currency market. Political foot-dragging by the incumbent government on the reversal of fuel and electricity subsidies — a prerequisite for the resumption of the loan programme by the International Monetary Fund — has further eroded the confidence of stakeholders.
Published in Dawn, May 14th, 2022