Web Desk (LTN NEWS): On Monday, the PKR lost Rs1.34 against the dollar on the interbank market, showing that it was still under a lot of stress.
At 11:45 a.m., the Forex Association of Pakistan said that the local currency was being traded at Rs222 per dollar, which was 0.6% less than it had been at the same time the day before.
Mettis Global Director Saad bin Naseer said that the rise of the dollar on international markets and the flooding in the country were the main reasons for the fall of the rupee.
People thought that destroying crops would make Pakistan’s current account deficit worse because it would have to buy wheat from other countries.
Read More: Value of rupee decreases for third day in a row
Today, the US dollar rose to its highest level against a group of currencies in 20 years. This happened after Federal Reserve Chair Jerome Powell said that interest rates would stay high for a longer time to slow down rising inflation.
Naseer said that another thing that hurt the rupee was a letter that Khyber Pakhtunkhwa Finance Minister Taimur Khan Jhagra sent to Federal Finance Minister Miftah Ismail. In the letter, Jhagra said that his government would not be able to provide a provincial surplus this year, which was a key requirement for the International Monetary Fund (IMF) program to start up again.
“Things will get better if the IMF’s executive board agrees to pay out the loan tranche at today’s meeting. The market is not very worried. “People are buying dollars with care, and the rupee is being pushed down,” the director of Mettis Global said.
The general secretary of the Exchange Companies Association of Pakistan (Ecap), Zafar Paracha, said that the devaluation of the rupee went against what the market was expecting.
He also said that the damage to crops would cause import costs to go up, which would make the current account deficit go up.
“The IMF hasn’t told us anything good yet. All of the agreements with friendly countries are linked to the IMF,” he said. He also said that feelings had changed because Jhagra’s letter had caused political tension between the federal and provincial governments.
Paracha also said that the smuggling of U.S. dollars into Afghanistan was to blame for the fall of the rupee because it caused a shortage of dollars on the market.
“Smuggling is at an all-time high, and all of our money is going to Afghanistan, so there aren’t enough dollars to go around. At the same time, the government’s decision to lift the ban on imports and put in place high regulatory duties has made it easier to sneak things like electronics into the country. This also makes it hard to get dollars.”
When compared to the dollar, the local currency hit a record low of Rs239.94 on July 28. By August 16, it had climbed back up to Rs213.90 in the interbank market. But since then, it has kept going down, losing Rs8.1 until August 26. (Friday).
