Rupee Just Hit a New All Time Low Against US Dollar

The Pakistani rupee extended losses on Wednesday to trade at 119.50/dollar, hitting an all-time low against the US Dollar. The rupee found no place to stay against the greenback in the open market. It fell to 119.50/dollar in an intra-day trade from Tuesday’s close of 118.40. However, it managed to close at 118.90/dollar, as per rate quoted by the Exchange Companies Association of Pakistan (ECAP). The central bank earlier had warned dealers against betting on depreciation of rupee, asking them to strengthen the embattled local currency as ample liquidity is available in the open market to meet foreign exchange demand. The development comes only days after the State Bank of Pakistan (SBP) held an emergency meeting with exchange companies. Analysts said the weaker rupee is likely to fuel inflation, putting pressure on the central bank to raise policy rate despite an economy struggling to grow in the face of the ongoing political crisis in the country and upcoming general elections. ALSO READ Pakistan Doesn’t Need to Devalue Rupee in the Near Future: Miftah Ismail They also added that the dollar rates increased due to Umrah pilgrims. The traders expect the currency to remain under pressure on importers’ demand amid low supply of the greenback. Meanwhile the association called an urgent meeting with the representatives of the exchange companies late in the evening to get support for the rupee. M Zafar Paracha, secretary general of ECAP, blamed smuggling of foreign currencies for the shortage of dollars as well. ‘’We the members of Forex Association of Pakistan (FAP) have decided to bring dollar to Rs118.70 for selling on Thursday morning,” said President FAP Malik Bostan. In the kerb market, the rupee depreciated by 1.2% in a week. However, the market situation is acting completely opposite to the claim of the the Prime minister’s Adviser on finance as he repeatedly said that there would be no further currency depreciation.