December 8, 2021 (MLN):The Pakistani Rupee (PKR) continued to remain under severe pressure as the currency hit a new all-time low during intraday trade, depreciating by 59 paisa against the US dollar on Wednesday mainly due to the widening trade deficit which has amplified the demand for the American currency.
Given this, nervousness is prevailing in the interbank market. It may have understood the logic of the supply-demand factor that determines the Rupee’s real value, Asad Rizvi, the former Treasury Head at Chase Manhattan said.
Obviously in the absence of SBP and with its softer approach why would PKR stabilize or regain strength, he added.
The ongoing depreciation of the domestic unit may be a part of IMF conditionalities, Malik Bostan, Presiden Forex Association of Pakistan told Mettis Global.
Though PKR witnessed minor gains the day before yesterday after the receipt of $3 billion under the Saudi Development Fund (SDF), the recovery quickly fizzled out when market participants came to know about the tough conditionalities of the fund, he noted.
