Continuous Decrease in Value of Rupee in Open Market
The US Dollar resumed its upward trajectory yesterday, with the interbank exchange rate reported by the State Bank at Rs. 262.6 at closing time. Intraday trading saw the exchange rate touch Rs. 264. This closing rate represents a 2.7% decrease in the value of the rupee. Despite being quoted as high as Rs. 269 in the open market, the scarcity of dollars remains unchanged.
On Thursday, the Pakistani rupee saw a significant drop in its value, losing 24 rupees in a single day. This marked the largest single-day depreciation in two decades, both in real and absolute terms. This sudden decrease in the value of the rupee has caused concern among economists and investors alike.
The last two days have seen a steep decline in the value of the rupee, with an overall drop of more than 12%. This recent trend has raised alarm bells, and many are speculating about the causes of this sudden depreciation and its potential impact on the economy.
The recent move by experts has been deemed necessary for boosting export revenue and bringing remittances back to formal channels. Despite the significant devaluation of the currency, the market still predicts further depreciation, causing a scarcity of dollar sales. The limited foreign exchange reserves of Pakistan, at a historic low of $3.67 billion, have also contributed to a severe liquidity crisis.
The dollar index decreased 0.28% this week, reflecting its decline versus 6 leading global currencies. Despite this, the rupee remains unaffected. According to reports, Pakistan devalued its currency in accordance with the IMF program, and an IMF delegation is set to visit the country from January 31st to February 7th.