November 11, 2021 (MLN): US Dollar (USD) hit 174 against Pakistani Rupee (PKR) in an intraday trade on Thursday in an interbank market, backed by the higher demand for the American currency, shattering the traders' sentiments.
The domestic currency has weakened by 1.07 rupees (10:51 PST) when compared to the previous day’s close of 172.93 against the greenback.
After PKR pared some of its losses in the previous week, it came under severe pressure due to the growing demand for dollars.
The spell of depreciation is encouraged by widening the trade gap.
Expressing his views on the current rupee slide, Asad Rizvi, the former Treasury Head at Chase Manhattan said, “The pressure is once again mounting on PKR due to supply constraints.”
An increase in oil consumption & higher prices is causing unrest, he added.
The rupee had started to gain ground on an account of the announcement of $4.2 billion financial support by Saudi Arabia and once it reached 169.97 per USD last week after witnessing a bleak phase of depreciation where it had made new lows almost every day.
However, Zafar Paracha, Former Secretary-General of Exchange Companies Association of Pakistan held Finance Minister, Shaukat Tarin responsible for the currency depreciation as the statement pertaining to further depreciation of home currency ahead by the Finance Minister, wrecked the traders’ confidence and created the push factor for speculators while speaking to Mettis Global.
In the backdrop of satisfactory performance of all the major economic indicators such as revenue collection, remittances, and foreign direct investment, PKR will soon turn back to stand around 165–166 if IMF does not impose any condition regarding the weakening of the local currency, he noted.
Meanwhile, the traders are also keenly looking for a conclusive note from Government and International Monetary Fund (IMF) talks.
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