Daily Times

Pakistan rupee continued its losing streak against the US dollar during the last week in the interbank market and shed Rs2.82 (-1.65 percent).

According to the State Bank of Pakistan, the US dollar opened at Rs171.18 and closed at Rs174 on Friday, the last working day of the week. Within the open market, the rupee was traded at Rs172/175 per dollar during the week.

During the last week, the rupee struggled for all the four sessions of the week, as Tuesday was a public holiday on account of Eid Milad-un-Nabi. The rupee set four new lows against the US dollar during the last four sessions and weakened by Rs1.60 paisas (-0.93 percent) on Monday, 69 paisas (-0.40 percent) on Wednesday, 49 paisas (-0.28 percent) on Thursday and 4 paisas (-0.02 percent) on Friday.

The Pakistani rupee shed Rs2.82 during the last week against the US dollar, while depreciation during the fiscal year 2021-22 has been Rs16.58. The local unit has shed Rs13.73 against the US dollar in the current year 2021. The local currency has maintained a downtrend after it touched 22-month high of Rs152.48 in May 2021, losing a cumulative Rs21.69 in the past five months to date.

Currency experts said that the rupee may remain under pressure this week due to $1.646 billion external payment by the State Bank of Pakistan and continuous rise in the international oil prices. The official foreign exchange reserves of the State Bank recorded a decline of $1.646 billion to $17.492 billion by the week ended October 15, 2021, compared to $19.138 billion by the week ended October 8, 2021. The State Bank of Pakistan attributed the decline in the foreign exchange reserves to external debt repayments, including the repayment of $1 billion against Pakistan International Sukuk.

The import bill of the country recorded an increase of 66.11 percent during the first quarter (July–September) of 2021-22. The country has spent foreign exchange worth $18.75 billion during the first quarter of the current fiscal year, compared to $11.28 billion in the corresponding quarter of the last fiscal year.

The oil import bill is the major reason for the massive depreciation in the local currency. The oil import bill registered a phenomenal growth of 97 percent to $4.59 billion during the first quarter of the current fiscal year, compared to $2.33 billion in the corresponding quarter of the last fiscal year. The surge in import bill has also significantly widened the current account deficit.