The Pakistani rupee continued its losing streak against the US dollar in the interbank and shed Rs0.89 (-0.52 percent) during the last week, mainly due to high import bill and volatile situation in neighbouring Afghanistan. According to the State Bank of Pakistan, the US dollar opened at Rs168.19 on Monday last in the interbank and closed at Rs169.08 on Friday, the last working day of the week. The Pakistani rupee shed Rs0.89 during the last five days against the US dollar, while depreciation during the fiscal year 2021-22 has been Rs11.66. The local unit has shed Rs8.81 against the US dollar in the current year 2021. The local currency has maintained a downtrend after it touched 22-month high of Rs152.27 in May 2021, losing a cumulative Rs16.77 in the past four months to date. During the last week, the rupee weakened by 53 paisa (-0.31 percent) against the US dollar on Monday and closed at Rs168.72. However, the local unit recovered on Tuesday and gained 20 paisa (+0.12 percent). However, the next three sessions proved tough for the rupee and it weakened by 16 paisa (-0.09 percent), 35 paisa (-0.21 percent) and five paisa (-0.03 percent) on Wednesday, Thursday and Friday, respectively. However, the rupee remained above its all-time low level against the greenback of Rs169.12 witnessed on September 15, 2021. Within the open market, the rupee was traded at Rs169/170.50 per dollar during the week. According to experts, the rupee-dollar parity will depend on the initiatives taken by the central bank to support the balance of payments position. They said that several factors impacted the rupee value during this period, which included widening of the trade deficit, current account deficit, Afghanistan uncertainty and others. The major factors, which deteriorated the rupee value, can be attributed to Afghanistan’s political uncertainty. Following the takeover by the Taliban, the foreign currency account of Afghanistan in the US was seized, which created a liquidity issue for the neighbouring country for import payments. The other major issue is the widening of the current account deficit. The current account deficit was recorded at $2.29 billion during the first two months (July-August) 2021, compared to a surplus of $838 million in the same months of the last fiscal year. The widening of the current account deficit may be attributed to large trade deficits and slower pace of inflows in the shape of export receipts and workers’ remittances. After the rupee hit an all-time low of Rs169.12 on September 15, 2021, the State Bank of Pakistan (SBP) reportedly intervened to support the local currency. However, the intervention was not sufficient to support the rupee. To support the balance of payments position, the central bank on September 23, 2021 took a major decision to ban bank financing for imported vehicles. Further, the State Bank also restricts the bank loans in terms of money and time frame for the locally-assembled motor vehicles.