The Pakistani Rupee (PKR) has once again posted losses against the US Dollar (USD) in the interbank market. Last week, on Friday, PKR had finally reversed its continuous downfall after an entire week of depreciation against the greenback.
The PKR closed at Rs. 155.31 to the USD at the end of the trading day today (Monday, 7 June), down significantly by 70 paisas compared to Rs. 154.61 to the USD on Friday (4 June), crossing the boundary of Rs. 155 exchange rate. This is the first time the PKR-USD exchange rate has cross Rs. 155 boundary since March 25, 2021.
A.A.H Soomro, Managing Director at Khadim Ali Shah Bukhari Securities, told ProPakistani, “Pressure on currency is stemming as the economy opens up, imports grow faster than the exports & REER at 103.”
He said that given high oil prices, TERF imports, economic resumption, and food one-offs, the trade deficit is nearing the Red Zone. “However, remittances and RDAs are solid. Hence, maintaining below Rs. 160 in the foreseeable future is likely amid political pressures.”
The recent downfall of the PKR may be explained by the rise in the real effective exchange rate (REER) coupled with the high demand by the importers for the dollar. Dealers see higher demand for the dollars due to the fiscal year ending on June 30, 2021, which is expected to keep pressure on the local unit.
PKR went down substantially by Rs. 1.51 against the Euro, significantly eroded by Rs. 1.03 against the Pound Sterling (GBP), and tumbled down by Rs. 1.78 against the Australian Dollar (AUD), and also posted losses of 90 paisas against the Canadian Dollar (CAD).
The PKR also lost against the UAE Dirham (AED) by nearly 19 paisas and against the Saudi Riyal (SAR) by 18.4 paisas.