KARACHI: The rupee’s depreciation continued on Friday, with the dollarĀ hitting a new high of Rs177.71 in the interbank foreign currency market, according to traders.
In the interbank foreign exchange market, the rupee lost 10 paisas to close at Rs177.71 versus the dollar, down from the previous day’s closing of Rs177.61, the previous record low of the local currency.
The demand for the dollar, according to the traders, remained strong for import payments. Improved foreign exchange reserves, they said, had also failed to strengthen the local currency.
The country’s foreign currency reserves increased to $25.15 billion in the week ending December 3, 2021, from $22.499 billion the previous week, according to the State Bank of Pakistan (SBP).
The Saudi Fund for Development (SFD) made a deposit with the SBP a week ago, which contributed to the increase in foreign reserves.
Higher commodity prices on international markets and growing local demand, according to dealers, are driving increased demand for dollars for import payments.
During the first five months (July-November) of the fiscal year 2021-22, the import bill grew by 69.17 percent to $32.93 billion, up from $19.47 billion in the previous fiscal year.
The enormous trade gap was compounded by the soaring import cost. The trade imbalance grew 112% to $20.59 billion in the first five months of this fiscal year, compared to $9.72 billion the previous year.
During the current fiscal year, the rupee has been under pressure. When comparing the exchange rate of Rs157.54 on June 30, 2021, to the closing rate of Rs177.71 on December 10, 2021, the local currency lost Rs20.71 or 12.8 percent.
However, at 3:35 p.m. PST, the open market buying and selling of the dollar was registered at Rs178.60/Rs180.35.