Shafaqna Pakistan: The rupee dropped to an all-time low of 161.5 to the US dollar in the inter-bank market on Wednesday. The currency depreciated by Rs4.5.
“The rupee came under pressure apparently due to (large) foreign debt repayment before the outgoing fiscal year closes on June 30, 2019,” said Topline Securities CEO Muhammad Sohail.
The rupee had closed at Rs156.98 against the dollar in the inter-bank market on Tuesday.
Other large international payments, the country is scheduled to pay, include petroleum oil import payments.
Besides, the corporate sector is buying dollars to settle their accounts ahead of the closure of FY19.
On the other hand, the country’s foreign currency reserves stand insufficient at only $7.6 billion.
Last week, the State Bank of Pakistan (SBP) Governor Dr Reza Baqir said, “The recent depreciation in rupee is seasonal”.
The rupee has cumulatively dropped over 9%, or Rs13.58, under the current round of rupee depreciation since June 3.
Baqir added this is a seasonal pattern as several companies need dollars to make international payments ahead of the closure of their yearly books on June 30, he said.
SBP official rules out further depreciation of rupee
“The pressure on the rupee would remain an ongoing phenomenon [going forward],” he said.
A currency dealer said speculation came true, that had suggested the rupee would settle around Rs160-165 under the condition set by the International Monetary Fund’s (IMF) to approve a bailout of $6 billion on July 3 for Pakistan.