Daily Times

Pakistani rupee managed to hold its ground at 177.98 against the US dollar as the greenback struggled in the international market.

According to the State Bank of Pakistan, the dollar opened at Rs177.98 in the interbank market on Thursday and closed at the same rate. Within the open market, the rupee was traded at 180/181 per dollar.

The US central bank kept its interest rate unchanged at 0.25 percent a day earlier, and said that it would double the pace of tapering to $30 billion per month. This, in turn, led to a sharp US dollar pullback from the vicinity of a 16-month high, which extended through the early part of the trading on Thursday.

December has so far proved to be a depreciating month for the rupee as the local unit has suffered eight all-time lows against the greenback and even stands at its lowest-ever level at present. The rupee’s depreciation during the ongoing fiscal year 2021-22 has been Rs20.56 and Rs17.83 in the current year 2021.

Soaring import bill and depleting forex reserves have been continuously building up the pressure on the rupee that also pushed inflation higher. In order to counter inflationary pressures and ensure sustainable growth, the State Bank of Pakistan (SBP) once again raised the policy rate by 100 basis points to 9.75 percent on Tuesday last.

Official data revealed that Pakistan’s trade deficit ballooned by 112 percent to $20.59 billion during the first five months (July-October) of the current fiscal year 2021-22. The trade deficit was at $9.72 billion in the same months of the last fiscal year. The import bill surged by 69.17 percent to $32.934 billion during July–November 2021-22 as compared to $19.468 billion in the same period of the last fiscal year.

The experts said that the rupee is hovering around all-time lows as the currency is undergoing a fundamental realignment which left the market perplexed about the direction in many ways. They said that the government should clarify the situation and take market participants into confidence in order to end the prevailing uncertainty as the given situation is only benefiting the speculators. They said that amid the ongoing macroeconomic conditions, the rupee should not have crossed the 165 mark against the dollar.