Karachi August 31 2023: The Pakistan Rupee has experienced a decrease in its value against the Dollar for the thirteenth consecutive day, making a new low in interbank.
This decline is attributed to uncertainties surrounding the ability of the caretaker setup to enact reforms and attract foreign direct investment, especially given the recent removal of import restrictions by the central bank.
Pakistan caretaker finance minister said the country is in worst than anticipated economic situation and the pressure on fiscal account did not provide room for subsidies except to protect the most vulnerable through higher social safety nets, like BISP.
In the interbank market, the Pakistan Rupee has dropped by PKR 1.43 or 0.5 percent, bringing its trading rate to a new low of 305.88 (PST 12:15) against the Dollar in country’s history. Notably, during the previous session, the Rupee concluded trading at 304.45 against the Dollar in the same market. The Rupee dropped PKR 17.39 or 5.7 percent against dollar since the caretaker setup took oath.
Conversely, in the open market, the Rupee fall by PKR 1.5 against the Dollar, resulting in a trading rate of 325 (PST 12:16).
Pakistan has agreed with IMF that the difference between Interbank and Open market should not be of more than 1.25%, which is PKR 3.75 at this rate. However, widening gap between open and interbank is the concerning sign for the currency market.
Few days earlier, Dr. Inayat Hussain, Deputy Governor SBP, pointed out that rising demand of dollars among the masses and import uplift are the primary drivers in dollars fluctuations. He disclosed this while briefing the Senate Committee on consistent fluctuations in dollar price.
The deputy governor stated that our current responsibility is solely to maintain a functional currency market and prevent any form of market manipulation.
