Dollar hits an all-time high, reached 160 against Rupee
- The dollar hits an all-time high in the interbank market.
- The roller-coaster drive by the local currency took its turn after Pakistan went into a financial deal with the IMF.
- Governor State Bank of Pakistan Dr. Reza Bakir says that this rupee depreciation is seasonal.
- Moeez Pirzada fears the backing of some foreign hands behind the devaluation of local currency.
- Dollar rate in interbank market hits at 160.
- There are speculations that the rupee will see further depreciation in the days to come.
Economic turmoil is perhaps one of the biggest problems that the newly formed democratic government of PTI is confronted with. The government has to clear the petroleum import payments, debt payments to international lenders before the start of the new fiscal year.
Dollar rate in the interbank market
The dollar has hit an all-time high in the interbank market and reached up to 160 against the rupee. Moeed Pirzada shown his reservations through his Twitter account on that much hike in the rate of the dollar. He said that the US dollar suddenly crossing 160 to PKR, without any fiscal reasons, on the day of Opposition’s APC. Was it part of some “External Agency” to give support to APC? Hear the Queen, can we rule out an external hand?
US $ suddenly crossing 160 to PKR, without any fiscal reasons, on the day of Opposition's APC; Was it part of some "External Agency" to give support to APC? Hear the Queen, can we rule out an external hand? ?
— Moeed Pirzada (@MoeedNj) June 26, 2019
He ruled out the possibility of some external hands increase in the rate of the dollar. An all parties conference was held today in which Maulana Fazl-ur-Rehman of JUI-F asked the opposition parties to give a tough time to the government and to observe a black day in the month of July.
Rupee depreciation is seasonal
In a recent statement, Governor State Bank of Pakistan Dr. Reza Bakir has said that this rupee depreciation is seasonal. Under the current round of rupee depreciation it has dropped over 8 percent, he added. Usually, companies purchase dollars to make international payments ahead of the new fiscal year, he further said about the season depreciation of the rupee.
Prime Minister Imran Khan in his latest address to the people has informed the public that half of the country’s income goes to the payments on loans taken already. Debt payments alongside payment of loans amount exert further pressure on the national currency.
Effect on Foreign Exchange Reserves
Continuous flight of dollar against the rupee lowers the country’s foreign exchange reserves as Pakistan’s foreign exchange reserves currently stand at $7.6 billion. The current free-fall of rupee started-off from June 3 and is forecasted to be continued in the days to come.
PTI government should take immediate steps to avoid any further depreciation in the value of Pakistani currency in the long run. On the accountability front, it must take stern action against the dollar hoarders. The current wave of depreciation of rupee emerged after the signing of $6 billion deal with International Monetary Fund.
What do you suggest to the incumbent government to control the depreciation of local currency? Please leave your comments