Rupee drops against dollar, traces Rs119.35 in kerb market
KARACHI: With a persistent decline in country’s foreign currency reserves, Pakistani Rupee plunged to Rs119.35 against US dollar in the kerb market on Saturday.
According to the central bank, rupee on Thursday had ended the day at Rs119.10 against the US dollar but stayed at Rs115.61 in the inter-bank market.
It is expected that the new government will have to devalue the rupee further to boost exports and bring in a higher amount of remittances.
It is all observed due to diminishing forex reserves of State Bank of Pakistan (SBP), which has reached a four-year low of $10.03 billion as, on May 25th, low inflows due to standing exports.
Last week, State Bank of Pakistan decided to introduce identification requirements for all foreign currency transactions equivalent to $500 or above on exchange companies and directed them to retain the copies of identification documents to comply with anti-money laundering rules which had contributed to slow down in the flow of dollars to the dealers.
Malik Bostan, President Pakistan Forex Association (PFA) defines the permanent pressure on the rupee is due to amplified demand of foreign currencies from Umrah pilgrims in Ramazan.
He also added that over two million Pakistani’s are granted visas to perform Umrah since December 2017 and most of them will visit Saudi Arabia during the holy month of Ramazan.
He further explained that due to Umrah and Hajj visits, the Saudi riyal and UAE Dirham used to be in surplus and are used to import dollars from Dubai in exchange.
As per credit rating agency Moody’s, it is projected that by June 2019 rupee can plunge by 7.75 percent and touch Rs125 to the dollar.