KARACHI: On the second consecutive day, the decline of the local currency, the rupee (PKR), continued from the start of the last commercial day of the week.
Removing the dollar cap and switching to a free float exchange rate system has caused the Pakistani rupee (PKR) to fall sharply as the currency lost 32.9 rupees in five consecutive sessions, settling at PKR 262.6 per USD, compared to the previous week’s close of PKR 229.67 per USD.
The currency depreciated by 9 rupees, according to the forex exchange reserve, and stood at Rs 264.
Yesterday, the rupee lost its value by 9.16% or more than 24 rupees. During the current week, the dollar has appreciated by Rs 32.9 rupees.
Talking about the devaluation of the currency, Sana Tawfik, an Analyst at Arif Habib Limited said, “The SBP had allowed this depreciation of the currency to make imports expensive and incentivize exports.”
“As a consequence of continuous PKR depreciation and controls imposed by the Central Bank on imports, the current account deficit came down significantly in 1HFY23, marking a 60% decline,” she said while talking to Metti Global.
Malik Bostan, the chairman of Forex Association Pakistan (FAP), expressed fear that we are near to the situation of Sri Lanka.
“Pakistan has a shortage of dollars, we are not able to import the raw material, our containers are stranded on port and we are paying demurrage,” he said.
To note, foreign exchange reserves held by the State Bank of Pakistan (SBP) dropped by $922.8 million to $3.68 billion during the week ended on January 20, 2022, according to the data released by the central bank on Thursday.
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