July 13, 2022 (MLN): Riding on a slippery slope, the Pakistani rupee (PKR) has lost around 80 paisa against the greenback in the interbank market in intraday trade compared to the previous close of 207.91 per USD.
The rupee was quoted at 208.65/208.95 [12:10 PST] with the trades reported at 208.70 per USD.
Amidst the delay in the IMF program and fast-depleting foreign exchange reserves due to higher import bill which has already messed up the current account balance, the local unit is under severe pressure.
To arrest the problem, the SBP on July 07, 2022, raised policy rate by 125 bps to 15% saying, “It should help cool economic activity, prevent a de-anchoring of inflation expectations and provide support to the Rupee in the wake of multi-year high inflation and record imports.”
Meanwhile, the dollar in the international market also remained firm ahead of U.S. inflation data.
Analysts are of the view that the expectations of interest rate hikes would be reinforced if the U.S. CPI is stronger than expected which would keep the dollar elevated.
