The PKR neared an all-time low against the dollar on Wednesday after falling 84 paise during the morning trade in the interbank market.
At 12:13 pm, the local currency was being traded at Rs239.75 per dollar — a depreciation of 0.35 percent from yesterday’s close of Rs238.91, data shared by the Forex Association of Pakistan (FAP) showed. The rupee had reached a record low of 239.94 per dollar on July 28.
Head of Research at Tresmark, Komal Mansoor, said the government was “paralyzed by inaction even though we are now in an IMF (International Monetary Fund) programme and can attract forex”.
“There are several advantages to intervening in an illiquid market like Pakistan,” she remarked.
While the strength of the dollar was a major worry for all economies, Mansoor pointed out that the Pakistani rupee was the worst-performing currency in the area.
On Wednesday, the dollar remained close to a two-decade high versus a basket of currencies as rates on US Treasury bonds jumped ahead of another aggressive rate hike anticipated from the US Federal Reserve.
The US dollar index, which compares the value of the dollar to a basket of other currencies, increased by 0.1 percent to 110.27, adding to an overnight rise of 0.6 percent. It was still very close to the 20-year high of 110.79 reached this month.
During the current calendar year, the value of the Pakistani rupee against the USD has decreased by around 26%. (CY22).
In the past 12 trading sessions, the dollar has risen 8.12 percent against the rupee, 36 percent since its CY21 peak on May 14, and 13.9 percent since the beginning of the current fiscal year (FY23).
To date, the administration has not been successful in arranging dollar inflows to increase the nation’s dwindling weekly foreign exchange reserves. The influx of $1.2 billion from the IMF loan was insufficient to persuade other creditors to adopt the Fund’s economic support plan.
