The Pakistani rupee (PKR) continued to depreciate against the US dollar on Thursday, closing near Rs240, another record low in the inter-bank market as a result of pressure from import payments and the government’s alleged inability to intervene.
The local currency fell by Rs3.92 (1.63 per cent) or more, or Rs239.94, against the dollar, according to the State Bank of Pakistan (SBP).
Due to the most recent depreciation, the rupee has fallen more than 13 per cent overall over the last 10 trading sessions. As a result of pressure from ongoing political and economic unrest, the rupee had lost Rs3.09 (1.31 per cent) or more on Wednesday. Its closing value was Rs236.02.
According to Business Recorder, which cited knowledgeable sources, Finance Minister Miftah Ismail stated on Wednesday that due to the agreement with the International Monetary Fund (IMF), government interventions in the foreign exchange (forex) market cannot be made to control the rate of the US dollar.
He insisted that the demand for payments against the $7.5 billion import bill from last month is what is putting pressure on the foreign exchange market. He did, however, guarantee that the problem with the US dollar rate and the stress on foreign exchange reserves will be resolved, and that the exchange rate is anticipated to stabilise starting in August.
In contrast, Pakistan reported a $2,275 million current account deficit (CAD) for the month of June 2022 as opposed to a $1,637 million deficit for the same month in the previous year. The currency is put under more stress as the current account deficit grows.
The CAD increased by $14.6 billion in a single year, from $2.8 billion in FY21 to $17.4 billion in FY22.