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Rupee continues to falter against US dollar

A representational image of Pakistani notes of Rs10, 20, 50, 100, 500, 1,000  and coins of Re1, Rs2 and Rs5. — AFP/File

KARACHI: The value of the US dollar touched Rs231 in the open market on Monday with the rupee falling Rs1.5 compared to Friday’s exchange rate — continuing a slide that saw it lose nearly 2% in the seven-session in the wake of a delay in the ninth review of the International Monetary Fund (IMF).

In the open market, it settled at Rs231 losing Rs1.5 against the greenback compared to Friday’s rate of Rs229.5.

Meanwhile, the currency lost 0.22% (or Re0.49) to close at Rs223.66 against the US dollar in the interbank market compared to Friday’s close of Rs223.17.

Speaking to Geo.tv, Pakistan-Kuwait Head of Research Samiullah Tariq said demand is higher than supply, and US interest rates have increased which has dried up liquidity.

Therefore, the demand for imports is strong which is also increasing the parity as well.

Other analysts believe that the following issues have resulted in the rupee sliding, these include:

  • Uncertainty over the ninth review by IMF
  • Growing risk of defaulting on its obligations to repay foreign debt despite Finance Minister Ishaq Dar’s reassurance
  • Absence of a timeframe regarding incoming financing from Saudi Arabia and China

The rupee has cumulatively decreased by 1.01% (or Rs2.24) in the past seven working days, compared to the November 10 close at Rs221.42, according to the State Bank of Pakistan’s data.

The US dollar was also firmly higher against major currencies on Monday, as rising COVID-19 cases in China led to new restrictions and weighed on global investor sentiment.

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