Karachi: With severe floods affecting economic activities in the country. The rupee maintained its 13th straight loss on Tuesday. and hit a record low against the US dollar.
in the interbank market The local unit lost Re1 or 0.42% and dropped to 238.91 rupees per dollar. Its value is down from the previous close of 237.91 rupees against the dollar.
The dollar now stands just Rs1.03 short from an all-time high of Rs 239.94 on 28 July 2022.
The fall can be caused by a number of factors. as well as the ever-growing demand for dollars from local importers. Among the country’s drought dollar reserves and higher import costs from the worst floods, etc.
Saad Hashmey, an independent economist, said the recent currency decline was due to the start of the flood and its detrimental impact on the country’s external accounts. This is because crop losses must be linked through imports amid less bright external flows.
“There is a high probability that the rupee will recover as soon as the foreign flow actually occurs. which they will eventually recover. It should be noted that the country’s external funding requirements are fully supported under the IMF (International Monetary Fund) program,” Hashmey added.
Zafar Paracha, secretary-general of the Pakistan Exchange Association, said that despite important announcements from the government and institutions, But the market’s perception of local authorities remains the same.
The government just announced a $3 billion rollover of Saudi Arabia. And the finance minister has assured economies that it will improve next month.
In addition, an IMF resident representative said the money lender would support Pakistan’s new construction and relief work. Still, such positive news hasn’t been able to change the market’s perception of local authorities.
The open market is facing a shortage of US currency.
Analysts said investors remained concerned about the impact of the floods on the economy in general and the external sector in particular. A key issue is managing IMF expectations while making room for relief and rehabilitation costs.
speak to Geo.tvSamiullah Tariq, Pakistan-Kuwait Investment Firm Addresses two main reasons behind the rupee fall: import pressures and tight liquidity.
“Peshawar’s foreign market pressure led by the Afghan trade Weighing in with local currency This is because the demand for the dollar is greater while the supply is less,” he said.