The US dollar has touched another historical high against the Pakistani Rupee on Wednesday as the greenback hit Rs. 162 in the interbank market during the mid day. It rose by Rs. 5.00 against the Rupee on Wednesday.
The rupee’s official exchange rate is supported by the central bank under a de facto managed float system and many analysts consider the currency to be overvalued.
Last week, the governor expressed confidence in the country’s economic future. He described uncertainty as “the biggest challenge” facing the economy.
State Bank of Pakistan’s Governor Reza Baqir held a press conference regarding the country’s economic outlook and role of State Bank of Pakistan.“We have adopted a market-based policy and SBP will monitor the demand and supply within the economy,” he said. He also stated that free float was not appropriated for the economy.
Another likely reason for the appreciation of the dollar is that Pakistan is scheduled to make most of the external debt repayment and interest payment by the end of June.
The dollar’s rise has increased because multinational companies are taking profits out of the country as the book closing date is approaching, which is June 30th. The demand for the dollar has increased, putting the interbank market under pressure.
The rupee has been falling against the greenback following an agreement with the International Monetary Fund on a $6 billion loan with expected strict conditions including a “market determined” exchange rate.
However, exports failed to register growth in value terms despite the central bank letting the rupee depreciate. Exports dropped 2% to $22.34 billion in the first 11 months compared to $22.75 billion in the same period last year.
This is a developing story and will be updated throughout the day as market status changes.