The rupee fell to its lowest level in four months against the US Dollar (USD) yesterday as it breached the level of Rs. 158, and further deepened the losses today.
The PKR deteriorated by 34 paisas against the greenback in the interbank currency market on Wednesday (23 June), closing at Rs. 158.53 against the USD, as compared to Rs. 158.18 on Tuesday (22 June).
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The PKR has been posting losses continuously for five weeks, but with sporadic improvements.
Higher import payments coupled with the expected delay in the sixth review of the International Monetary Fund’s (IMF) $6 billion loan program are weighing down the rupee in the international currency market.
The steep downfall yesterday and today is also being attributed to the likely delay in the release of the IMF’s next tranche of the extended fund facility (EFF) as Pakistan and the IMF remain stuck on details of tariff increases among other fiscal reforms.
Furthermore, the trade deficit is re-entering the danger zone, which, along with the strengthening of the USD in the international market, is also pressuring all the emerging markets, including Pakistan.
The upcoming FATF meeting might also have a notable impact on the rupee’s parity against the greenback. However, the resumption of Saudi Arabia’s oil facility should help the PKR stabilize.
It was not long ago when the PKR had been labeled “the world’s best performing currency” after it had appreciated the most against the USD during the first three months of the calendar year (January to March 2021). The recent weeks, however, have shown the PKR to be among the worst currencies as the local unit became the worst performer in Asia since its recent downhill as it dropped for five consecutive weeks.
The PKR has also been posting blanket losses against the other major currencies, but with rare improvements. Today was no different for the local unit.
It went down by Rs. 1.05 against the Euro, by Rs. 1.80 against the Pound Sterling (GBP), by Rs. 1.27 against the Australian Dollar (AUD), and by Rs. 1.22 against the Canadian Dollar (CAD).
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The PKR posted losses against both the UAE Dirham (AED) and the Saudi Riyal (SAR) as it eroded by nine paisas against them both in the interbank currency market today.
