- Suffers another 0.19% decrease on Monday
The Pakistani rupee lost further value against the US dollar, closing over the 167 level for the first time since August 2020 in the inter-bank market on Monday.
At close, the Pakistani currency finished at Rs167.23, another 0.19% decrease, as per the State Bank of Pakistan (SBP). It last closed over 167 on August 28, 2020.
The currency's decline has been ongoing since mid-May when it was hovering around the 152-mark. Since then, it has lost close to 9.5% amid widening trade and current account deficits.
Pakistan’s trade deficit increased to $7.5 billion during July-August this year, which is 120% higher than the same period of the previous fiscal year. Imports during the two-month period increased 73% to $12.1 billion, causing concern among all stakeholders.
Meanwhile, escalating tensions in neighbouring Afghanistan amid the takeover by Talban have also contributed to the rupee's decline.
The cessation of $5 to $7 million daily inflow from Afghanistan to Pakistan subsequent to the Taliban takeover, the $1.5 to $2 million outflow from Pakistan to Afghanistan as Afghans remit money to their families back home with the Afghan banking channels suspended have also been given as reasons. Pakistan's widening trade deficit and non-intervention of State Bank of Pakistan (SBP) in the market are also factors contributing to the ongoing slide of the rupee against the dollar.
Many believe the rupee's slide will stop when its value touches the 167-168 mark, citing the occurrence last year when the currency started to appreciate around the same level.