The rupee saw another massive fall against the US dollar, depreciating 1.03% in the inter-bank market on Tuesday.

As per the State Bank of Pakistan (SBP), the rupee closed at 184.44 after a day-on-day depreciation of Rs1.90, or 1.03%. The rupee had opened the week with a 0.54% loss on Monday as well.

After enjoying a brief phase of appreciation last week, Pakistan’s currency has returned to its losing ways that saw it hit a record low earlier this month. A widening current account deficit, high import bill, and falling foreign exchange reserves have hurt market sentiment, say analysts.

Oil prices, a major determinant of currency parity, see-sawed on Tuesday as investors fretted over tight global supplies after Libya halted some exports and as factories in Shanghai prepared to reopen post a COVID-19 shutdown, easing some demand worries.

“The inability of the new government to take fiscal and monetary tightening measures is not boding well for the economy,” Saad Khan, Head of Research at IGI Securities, told Business Recorder.

Khan said that the government is “shying away from taking non-popular decisions”, as it kept oil prices unchanged.

Meanwhile, inflation is still expected to jump due to the Ramazan factor, as food prices remain high. “This is a trend in Ramazan that the price of food items shoot up due to rising demand,” added Khan.

The expert called on the government to take tough measures in order to arrest decline of the country’s foreign exchange reserves.

“The government need to ban the import of non-luxury items and issue Euro bonds at the earliest to ramp up its declining reserves. Furthermore, the IMF programme should be revived to get a grip on the economy,” said Khan.

Pressure has continued to mount on the external side after Pakistan’s trade deficit widened by 70.76% from $20.802 billion in July-March 2020-21 to $35.522 billion in July-March 2021-22.

Khan was of the view that the rupee is expected to cross the 185-186 level in the coming days.

At the same time, foreign exchange reserves held by the SBP have fallen below $11 billion, which is the lowest level since June 2020. Total liquid foreign reserves held by the country stood at $17.03 billion as of April 8, added the SBP.

Inter-bank market rates for dollar on Tuesday

BID Rs 183.30 OFFER Rs 183.50

Open-market movement

In the open market, the PKR lost 3 rupees for both buying and selling against USD, closing at 185 and 186, respectively.

Against Euro, the PKR lost 2.90 rupees for buying and 2.50 rupees for selling, closing at 198 and 199.50, respectively.

Against UAE Dirham, the PKR lost 79 paisas for buying and 70 paisas for selling, closing at 50 and 50.40, respectively.

Against Saudi Riyal, the PKR lost 60 paisas for both buying and selling, closing at 49 and 49.40, respectively.

Open-market rates for dollar on Tuesday

BID Rs 185

OFFER Rs 186