- Closes at 168.02 against the dollar in the inter-bank market
Pakistani rupee registered yet another fall against the US dollar, dropping below the 168 level to inch near its all-time low recorded in August last year.
As per the State Bank of Pakistan (SBP), the currency closed at 168.02 against the dollar in the inter-bank market, registering a decline of Rs0.36 or 0.21%. The PKR hit its lowest value of 168.45 against the greenback on August 26, 2020.
As per Arif Habib Limited, the PKR has lost 6.2% since Jun 2021 and 9.4% against the USD since its recent high recorded on May 14, 2021.
“Rupee's decline can only be stopped if imports are curtailed, and exports/remittances increase,” Malik Bostan, Chairman Forex Association of Pakistan, told Business Recorder.
Pressure on the rupee has increased due to Pakistan's current account deficit that has widened in recent months due to the high import bill.
The rise in import bill is attributed to a hike in international oil prices in August, import of commodities, raw materials, and machinery. However, some luxury items also seem to be part of the mix.
Bostan said that the government should take strict measures to curb the import of luxury items, especially autos.
He said that the improved situation in Afghanistan would prove beneficial, as it will allow Pakistan access to a multi-billion dollar market.
The rapid PKR depreciation has raised some eyebrows and the government has expressed concern over increase in imports as well. Finance Minister Shaukat Tarin, while briefing the Senate Standing Committee on Finance on Thursday, said that the government is looking whether the increase in import bill is reflecting excessive growth, i.e., unsustainable growth.
"If the growth is increased from four percent to five or 5.5 percent, it is okay. But we do not want to go to seven percent, which is unsustainable," the finance minister said.