Pakistan's rupee reached a fresh low against the US dollar, depreciating yet another 0.10% in the inter-bank market on Thursday.
As per the State Bank of Pakistan (SBP), the PKR closed at 177.61 against the USD after a day-on-day depreciation of 18 paisas or 0.10%. On Wednesday, PKR closed at the then-record low of 177.43 against the USD.
The rupee has depreciated by 11.12% CYTD and 12.73% on FYTD basis against US dollar.
The fall comes as pressure mounts on the currency amid a widening trade deficit and falling foreign exchange reserves.
Against USD: Pakistan's rupee weakens to record level
The country’s trade deficit widened by 133.99% on a year-on-year basis and stood at $4.963 billion in November 2021 compared to $2.121 billion in November 2020. Imports witnessed 82.83% growth on a year-on-year basis in November 2021 and stood at $7.847 billion compared to $4.292 billion in November 2020.
“It seems nothing is working in favour of PKR,” tweeted Asad Rizvi, Ex-Treasury Head at Chase Manhattan.
The analyst said that the central bank's Monetary Policy Committee (MPC) is due on December 14 “but SBP does not discuss rupee”.
Jul-Nov trade deficit widens 111.74pc YoY: PBS
The SBP's MPC is scheduled to meet on December 14 and comes only 24 days after the previous meeting. Last month, SBP hiked the interest rate by 150 basis points, taking it to 8.75% as it announced the monetary policy.
“Elsewhere, under normal circumstances hike in interest rate makes currency attractive due to interest rate differential. [However,] in our part of the world it doesn’t,” added Rizvi.
Earlier, Ismail Iqbal Securities in its latest survey revealed that a majority of participants are anticipating a further hike in dollar rates against the Pakistan rupee in the coming months.
“Around 60% of the market participants expect exchange rate to remain between 180-185 by June-22 as compared to 30% in previous survey,” the report stated.
Inter-bank market rates for dollar on Thursday
BID Rs 177.61
OFFER Rs 177.71
Open-market movement
In the open market, PKR lost 70 paisas for buying and 80 paisas for selling against USD, closing at 179 and 180.30, respectively.
Against Euro, PKR lost one rupee for buying and 1.10 rupees for selling, closing at 200.50 and 202.50, respectively.
Against UAE Dirham, PKR lost 5 paisas for both buying and selling, closing at 49.41 and 49.90, respectively.
Against Saudi Riyal, PKR lost 10 paisas for both buying and selling, closing at 47.10 and 47.55, respectively.
Open-market rates for dollar on Thursday
BID Rs 179
OFFER Rs 180.30