KARACHI: Pakistani Rupee declined farther on Friday continues the losing streak against United States dollar as higher demand for dollar pair with dollar appreciation against weighting of major currencies on local unit.
The local unit closed at 228.18 after losing 2.76. in interbank market, down in yesterday’s closing value of 225.42 – when he lost 2 rupees – according to the State Bank of Pakistan (SBP).
The Pakistani currency collectively fell 9.21% or 4.2%. against US dollar from this week trade started and looks like on the same picture that has been witnessed two months back – when the local unit hit 239.37 on July 28th.
Foreign exchange dealers announced the pressure on rupees due to shortage of dollars in in market as it is higher demand for dollar after government lifted the ban on import of luxury items.
They are also noted that like in rise in imports, remittances and exports did not increase to required amount, thereby causing a breach in food-demand job title of in dollar.
In addition to them, the dollar is a global strengthening also leading to the appreciation of the dollar against rupee. United States dollar which compares the value of in dollar to six major rival currencies rose 0.04% to 109.73 after peaking at 110.79. on Wednesday is a level not seen since June 2002.
Other factors causing the depreciation of the rupee include political unpredictability, decline in investor confidence in in economy, higher foreign currency requirements (due to flood- related costs, backlog of letters of loan payments and an increase in Afghan trade), and slower tributaries.
cost of damage and devastation caused due to floods in Pakistan has surpassed the volume of disbursed loans from the International Monetary Fund (IMF).
Initial estimates place economic damage caused due to heavy floods in Pakistan with a staggering $10 to $12.5 billion and this is at a time when government also intends to sharply reduce Public Sector Development Program (PSDP).
Analysts say the resumption of IMF loan program dispelled concerns about a scenario that would be difficult to handle in near future and gave rise to hopes of unlocking money from other multilateral lenders and friendly countries.
The biggest floods hit in economy in decades, probably cause slowdown in economic growth. A large-scale flood damaged cotton and rice crops that would also reduce export country and expand current account deficit.
Destruction across the country also demanded urgency for salvation and relief for which the government bought more essentials.
“The rupee bounced back after the State Bank of Pakistan withdrew its decision to allow exchange companies for the export of US dollars to international marketcurrency dealer told the news.
The Civil Aviation Authority (CAA) requirement that all foreign cash held on arrival international passengers will be announced add to pressure already placed on rupee.
According with CAA announcement declaration form containing information about national and foreign currency should be filled out and handed over to airline employees.
The restriction has been placed in place adhere to the guidelines of the Financial Action Task Force on Money Laundering (FATF).
Travelers are currently hesitant to take in foreign currencies. After central bank export allowed of Since August 15, exchange companies have exported about $7 million worth of US currency.
