PKR Falls To New Low Of 237 Against Dollar

The rupee continued to slide against the dollar on Wednesday, hitting another low of Rs237 in the interbank market.

According to the Forex Association of Pakistan (FAP), the local currency fell from Rs4.07 to Rs237 from yesterday’s close of Rs232.93 at 11:50 am.

FAP chairman Malik Bostan highlighted that there was a need to increase dollar inflows as it would stabilise the rupee.

“The central bank should take strict measures against exporters who are not bringing back their proceeds to the country in due time,” he said.

He further stated that the local currency should be used for trade with Afghanistan as it would save $2 billion in foreign exchange.

Presently, Bostan continued, Pakistan’s inflows were short. “In such a situation, the transfer of $2 billion to Afghanistan [for imports] is increasing our difficulties,” he added.

Komal Mansoor, head of strategy at Tresmark, told Dawn.com that the pressure on the rupee would persist as long as there was a shortage of dollars.

“Exchange companies are offloading their inventory and selling dollars to the bank to bridge some gap but demand far exceeds supply,” she said, adding that “in a desperate move” banks were willing to buy dollars from exporters at a rate even higher than the interbank rate.

Meanwhile, Mettis Global Director Saad Bin Naseer was hopeful that the pressure on the rupee would ease in the upcoming sessions ahead of inflows from the International Monetary Fund (IMF) and friendly countries

“Demand from importers has fallen significantly during July,” he said.

“As per the finance minister, total imports so far during July (as of July 25) have reached only $3.7bn. This will alleviate demand-side pressures significantly and may even keep the current account balance in surplus for July,” he added.

The dollar has come under renewed pressure amid higher demand from importers. Bankers say the “import mafia” has practically drowned the national economy and is still insisting that more imports be allowed while the country is already on the brink of default.

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