Pakistan's rupee continued to fall for the second successive day, crossing the 171 mark for the first time to close at a record low against the US dollar in the inter-bank market on Tuesday.
As per the State Bank of Pakistan (SBP), the PKR closed at 171.04 against the USD, a day-on-day depreciation of 30 paisas or 0.18%. The latest drop in PKR has beaten the previous record by eight paisas, which was registered last week.
“The PKR is under continuous pressure owing to increasing current account deficit, and uncertainty due to the ongoing negotiations with the International Monetary Fund (IMF),” Faisal Javed Khan, Head of Equities at IGI Securities, told Business Recorder.
Furthermore, rising commodity prices as well as uncertainty in neighbouring Afghanistan are also taking a toll on the local currency, he said.
“Pressure will remain on the rupee for 1-2 months,” said Khan, adding that the decrease in commodity rates could help reduce some pressure.
Despite double-digit growth in overseas workers’ remittances and exports, the PKR has remained under pressure due to the widening current account deficit and high imports. The currency has shed over 11% since its recent high in May.
The government is taking administrative measures to check the PKR slide, said Asad Rizvi, former treasury head Chase Manhattan Bank, in a tweet on Tuesday.
“Will be known soon if the measures taken are enough or not,” he added.
The SBP has taken a number of measures to curb undesirable foreign currency outflow, especially to Afghanistan. Under new restrictions, persons travelling to Afghanistan will be allowed to carry only $1,000/- per person per visit with a maximum annual limit of $6,000; Exchange companies will be required to conduct biometric verification for all foreign currency sale transactions equivalent to USD500/- and above and outward remittances.
Furthermore, Exchange Companies will sell cash foreign currency and make outward remittances, equivalent to $10,000/- and above, against receipt of funds through cheque or banking channels only.
Inter-bank market rates for dollar on Tuesday
BID Rs 170.95
OFFER Rs 171.10
In the open market, the PKR lost 50 paisas for buying and 60 paisas for selling against USD, closing at 171 and 171.60, respectively.
Against Euro, the PKR remained unchanged for both buying and selling, closing at 196.50 and 198, respectively.
Against UAE Dirham, the PKR lost 30 paisas for both buying and selling, closing at 47.70 and 48, respectively.
Against Saudi Riyal, the PKR lost 10 paisas for both buying and selling, closing at 45.30 and 45.50, respectively.
Open-market rates for dollar on Tuesday
BID Rs 171
OFFER Rs 171.60