Rupee Drops Below Rs. 168 Against the US Dollar for the First Time Since 2020

The Pakistani Rupee depreciated against the US Dollar beyond the Rs. 168 mark for the first time since August 2020 today.

The local currency (PKR) lost 36 paisas against the US Dollar (USD) to close at Rs. 168.02 today.

It depreciated by 0.24 percent against the USD to close at Rs. 167.66 yesterday.

Securities brokerage and investment banking firm, Arif Habib Limited, tweeted that this was the PKR’s lowest value since August 26, 2020.

It added that the currency has fallen by 6.2 percent since June 2021 and by 9.4 percent since its peak on May 14, 2021.

PKR lost 36 (0.21%) paisa against US dollar and closed at 168.02

Lowest level since 26-Aug-20
-6.2% since Jun’21
-9.4% since its recent high (14-May-21)@StateBank_Pak#SBP #Pakistan #Economy #AHL pic.twitter.com/fDpy5IOQ43

— Arif Habib Limited (@ArifHabibLtd) September 10, 2021

Research Fellow at SDPI, Sajid Amin Javed, said that he did not believe the PKR’s depreciation was a major cause for concern.

Present fall of #rupee to #dollar despite increase in foreign reserves has strong #economic explanations.

Depreciation is reflecting changes in economic fundamentals, such as #trade, CAD, future expectation.

Don't buy conspiracy theories.

My thoughts!https://t.co/lv88bWjB9u

— Sajid Amin Javed (@Sajidaminjaved) September 7, 2021

He told TD Digital that the State Bank of Pakistan’s (SBP) reluctance to artificially adjust the PKR’s value was a positive sign that the institution was no longer willing to intervene in currency markets.

Javed explained that he did not believe the currency’s depreciation would contribute to higher inflation. He said that asking the SBP to use foreign reserves to strengthen the PKR would lead to depletion of reserves, a rise in the current account deficit, and higher inflation.

He concluded that he believed that the PKR’s fall in value was the natural result of several changing economic fundamentals.

The local currency also depreciated against the other major currencies today. It lost 76 paisas against the Euro, 1.82 rupees against the Pound Sterling (GBP), 1.19 paisas against the Canadian Dollar (CAD), and 60 paisas against the Australian Dollar (AUD).

It also lost 10 paisas each against the Saudi Riyal (SAR) and the United Arab Emirates Dirham (AED).