KARACHI: The Pakistani rupee on Thursday depreciated against the US dollar by 17 paisa in the interbank market and was trading around Rs156.40 till the last report came in.
Yesterday, the local currency appreciated by 39 paisa against the greenback in the interbank market and closed at Rs156.23. On Monday, the local currency gained 24 paisa against the greenback and closed at Rs156.52.
On Friday, the rupee appreciated by 66 paisa against the dollar and closed at Rs156.86 in the interbank market.
In the last two months, the rupee has improved by Rs7.39 against the dollar in the interbank market. Within two months in the open market, the US dollar has lost its value by Rs6.80 against the rupee.
Earlier, Pakistan had received higher remittance inflows from overseas Pakistanis in the first month of July of the current fiscal year 2019-20.
Currency traders were of the view that the increasing inflows of remittance in have supported the local rupee in the market.
In the earlier weeks, the rupee was observed to cumulatively depreciate against the greenback, which in turn had resulted in increased prices of goods and hardships for the general public.
The SBP has let the rupee depreciate significantly in the inter-bank market after finalising an agreement with the International Monetary Fund (IMF) for a loan programme on May 12.
The IMF has asked Pakistan to end state control of the rupee and let the currency move freely to find its equilibrium against the US dollar.
On the other hand, the World Bank Group has also supported the idea of leaving the rupee free from state control in an attempt to give much-needed boost to exports and fix a faltering economy.
In the previous weeks, the local currency has depreciated massively despite receiving the first tranche of $991.4 million from the International Monetary Fund (IMF).
The stringent conditions – on which the global moneylender has formally approved the bailout package of $6 billion for Pakistan – seem to have exerted more pressure on the local currency.
The gradual drop in the rupee had come due to high demand for the dollar against thin supply as the country continued to make aggressive international payments to partially pay off huge foreign debt and for imports.
Economists are of the view that effective measures must be implemented on the priority basis to recover the state from the balance of payment deficit.
Besides increased demand of the greenback in the local market, they had termed ‘balance of payments deficit’ as the main reason in the recent hike in the value of the US dollar.
