Jittery Pakistani rupee slumps against US dollar heavily

The US dollar after suffering a pulverizing for the last couple of days at the hands of Pakistani rupee, seems to have regained its strength by adding Rs1.73 paisas to its value in the interbank trading on Friday, reported 24NewsHD TV channel.

The forex dealers informed that at the start of trading activity in the interbank today, the US currency was traded at Rs201.50 up by 73 paisas against yesterday’s close of Rs200.77, but later the greenback built on its gain and added Rs1.73 to its value and now being traded at Rs202.50. 

Interbank closing #ExchangeRate for todayhttps://t.co/pcqWSPv0ds pic.twitter.com/Fl8yIB9Y30

— SBP (@StateBank_Pak) June 9, 2022

The market sentiments remained unsteady as government is going to present its annual budget for the next fiscal year today with an estimated enormous trade deficit nearing Rs5 trillion. It means the inflationary pressure will be high and the local currency is set to shed its value in the market. 

Besides this, the depleting forex reserves, rising import bill and ballooning trade deficit are contributing to the fall of Pakistani rupee.  

According to weekly data released by State Bank of Pakistan on Thursday, the total liquid foreign exchange reserves held by the country dropped by $595 million or 3.8% WoW to stand at the lowest level of $15.18 billion since Oct 25, 2019, during the week ended on June 3, 2022, compared to $15.77bn in the previous week.

The data further revealed that reserves held by the central bank during the week dipped by $497mn or 5.1% WoW to clock in at the lowest level of $9.2bn since Nov 29, 2019, mainly due to external debt repayments.

Similarly, the reserves of commercial banks went down by $98mn or 1.6% WoW to $5.95bn.

According to Mettis Global, the current level of foreign currency reserves is barely enough to cover 1.35 months of imports.

Reporter Ashraf Khan