The US dollar extended its gains on Friday, crossing Rs208 in early morning interbank trade, which analysts attribute to a delay in the accord with the International Monetary Fund (IMF) and quickly dwindling foreign exchange reserves.
The unfettered dollar appreciation has caused it to rocket to new historic highs, putting huge pressure on the Pakistani rupee, which has been quickly losing value in interbank trading over the last four weeks.
Experts believe that growing imports and a balance-of-payments problem were the primary factors for the Pakistani currency’s depreciation.
After being buffeted by the weak rupee, the greenback closed yesterday at Rs207.67. As the trading day began on Thursday, the Pakistani rupee initially gained 46 paisas, but the US dollar quickly retaliated, breaking through another historic barrier of Rs207. As trading closed, the greenback gained Rs1.21 and finished the day at a record level of Rs207.67.
Interbank closing #ExchangeRate for todayhttps://t.co/MtTEroZPTd pic.twitter.com/qxws6Ceeot
— SBP (@StateBank_Pak) June 16, 2022
The dollar has become Rs26.49 more expensive since the establishment of a new coalition government.
Uncertainty about the IMF arrangement with the government of Pakistan, according to financial experts, is one of the causes of the local currency’s continuous decline against the US dollar.
Aside from that, another powerful factor weighing on the Pakistani rupee is the country’s rapidly diminishing foreign reserves. On June 10, the central bank’s reserves were $8.98 billion, down $241 million from the previous week, while commercial banks’ reserves were $5,957.7, bringing the total liquid FX reserves to $14,943.0.
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