Pakistani rupee at new low as losing streak continues

As efforts continued to narrow the gap between exchange rates, Pakistani rupee hit a new record low at Rs304.45 against the US dollar in the inter-bank market on Wednesday, stoking fears that inflation would remain at elevated levels and dent economic activities.

According to the State Bank of Pakistan’s (SBP) data, the rupee depreciated 0.46%, or Rs1.40, to Rs304.45/$ in inter-bank trade. With the fresh decline, the currency remained on a record-breaking downward spree for the seventh successive working days.

According to the Exchange Companies Association of Pakistan (ECAP), the rupee dropped 0.46%, or Rs1.50, to Rs319.50/$ in the open market. Consequently, the difference between the two markets widened to 5% (Rs15.05), which was significantly higher than the International Monetary Fund (IMF)’s recommended level of 1.25% (slightly over Rs4 at current parity).

A currency dealer said that the rupee had dropped to Rs327/$ in retail trade, widening the gap even further to 7.40%, or Rs22.50 – a worrisome situation, particularly for the low- and middle-income groups, which were already agitating against the soaring inflation and inflated electricity bills.

In the backdrop of rupee depreciation, the gold pricing committee increased the commodity’s price by Rs2,900 to Rs236,400 per tola (11.66 grams).

The increase in the metal’s price came partly owing to a rise in the global market, where bullion went up $21 to $1,938 per ounce (31.10 grams).