Pakistani rupee depreciated against the US dollar in the first session of 2022 by 24 paisas (-0.14 percent). The State Bank of Pakistan said that the dollar opened at Rs176.51 in the interbank market and closed at Rs176.75 on Tuesday. The rupee remained a bit volatile during the session, showing the intraday high bid of 176.75 and low offer of 176.20. Within the open market, the rupee was traded at 178/179 per dollar.
The currency experts said that demand for the dollar remained high as the market opened after three days. Moreover, markets in Europe and the United States also opened a day earlier after the Christmas season. This increased demand for the greenback. Moreover, the US dollar jumped against its peers in late trading on Monday last amid an upward momentum in US Treasury bond yields. The dollar index, which measures the greenback against six major peers, increased 0.64 percent at 96.2053. The dollar strengthened against yuan, euro, pound, Australian dollar, Japanese yen, Swiss franc, and Canadian dollar.
Despite State Bank of Pakistan’s intervention and the general bias for a strong rupee, the local unit has depreciated by Rs19.32 during the ongoing fiscal year 2021-22 and Rs0.24 in the current calendar year. The local currency weakened by 10.44 percent (Rs16.68) against the dollar during the calendar year 2021.
The experts warned that trade and current account deficits due to rising import bill are major threats to the rupee’s stability. Further, the decline in the foreign exchange reserves also threatens the rupee stability. The foreign exchange reserves held by the country decreased to $24.27 billion from $24.63 billion in a week, the SBP said on Thursday. The reserves held by the central bank during the week decreased by $298 million to $17.855 billion. Likewise, the reserves of commercial banks dropped to $6.41 billion from $6.48 billion.