KARACHI: According to traders, the Pakistani rupee fell 25 paisas versus the dollar on Monday due to significant demand for foreign currency for external payments.
The rupee closed at Rs176.49 versus the dollar, up from Rs176.24 in the interbank foreign currency market on Friday.
As the market reopened after two weeklong vacations, dealers reported that dollar demand remained high during the day owing to external payments for imports.
Rising worldwide oil costs and a reduction in the country’s foreign exchange reserves were major obstacles to the rupee’s stability.
Despite the State Bank of Pakistan’s (SBP) actions restricting the realisation of export proceeds to strengthen the rupee, the local currency fell during the day.
The SBP asked exporters on January 5, 2022, to realise their export earnings within 120 days of shipping, rather than 150 days, as they stated.
On December 30, 2021, the government introduced the bill to fulfil one of the International Monetary Fund’s (IMF) requirements for approval of the next tranche of over $1 billion.
Following the bill’s passing by the National Assembly on January 13, 2022, the president gave it assent to make it effective.
Rising oil prices may cause the rupee to fall in value in the coming days, since Pakistan is a net importer of petroleum goods to meet local energy demands.
The country’s oil costs grew by 113.39 percent in the first half (July-December) of this fiscal year, compared to $4.77 billion in the same period last year.
Because of greater foreign payments, the local currency has remained under pressure since the start of the current fiscal year. The rupee fell 18.95 percent, or 12.02 percent, from Rs157.54 to the dollar on June 30, 2021 to Rs176.49 on January 24, 2022.
On December 29, 2021, the rupee reached an all-time low of Rs178.24.
At 4:00 pm PST, the open market buying and selling of the dollar was reported at Rs 178/Rs 179.5.
