The PKR continued to depreciate on Tuesday, losing another Rs1.09 against the dollar during morning trade in the interbank market.
The local currency was changing hands at Rs239 per dollar at 11:45am, according to the Forex Association of Pakistan (FAP). This equates to a depreciation of 0.45 per cent from yesterday’s close of Rs237.91, bringing the PKR near the all-time low of Rs239.94 on July 28.
Exchange Companies Association of Pakistan (Ecap) General Secretary Zafar Paracha blamed the rupee’s decline on speculation by banks, claiming that they had “made a year’s worth of profits in two months”.
He urged the State Bank of Pakistan (SBP) to take action against banks instead of “saving face” by going after a few exchange companies. The Ecap general secretary also called on the government to revisit trade and immigration policies with Afghanistan and Iran, saying they were “eating up our foreign reserves and revenues”.
Paracha said there was a shortage of the greenback in the market due to which Ecap had decided to cap the amount of dollars being sold, adding that this would help prevent the difference between rates in the interbank and open markets from widening.
He noted that after the International Monetary Fund’s (IMF) deposit, Saudi Arabia had announced the rollover of a $3 billion loan for a year and the Asian Development Bank (ADB) had said it was working on a programme for food security, education and rehabilitation.
“Since positive developments are happening, [we] expect the rupee will start gaining,” he said, adding that this expectation was bolstered by the SBP’s “good controls” and active steps.
Alpha Beta Core CEO Khurram Schehzad said the rupee fell due to the dollar strengthening against major currencies in the international market.
“Floods are adding more pressure on PKR due to expectedly higher imports ahead on account of agriculture and food due to massive devastation of essential crops.”
Meanwhile, Karachi Chamber of Commerce and Industry President Mohammad Idrees lamented that due to the PKR’s continuous decline against the dollar, import of raw materials was becoming more expensive. This, in turn, would negatively affect the export target, he warned.
He urged Finance Minister Miftah Ismail to immediately call a meeting with stakeholders.
“The widening trade deficit will increase our problems. A concrete policy to curb imports will need to be made and the dollar’s rate will need to be fixed,” he commented.
The rupee has been on a losing streak since Sept 2. Data compiled by financial data and analytics portal Mettis Global showed the rupee’s value has declined 13.9pc or Rs33 since July 1.
During the last 52 weeks, the PKR has lost 29.17pc against the greenback. It had reached a record low of Rs239.94 on July 28.