KARACHI: The rupee free fall remained unabated against the dollar on Tuesday as the macroeconomics of the country worsened besides a lack of funding to boost the foreign exchange reserves.
The exchange rate witnessed a loss of Re1 to reach Rs238.91 against the dollar from the previous days’ closing of Rs237.91 at the interbank exchange market.
Currency experts said that the local unit continued to take battering as the dollar is strengthening against major currencies in the international market.
The recent floods across the country have added more pressure on the rupee due to expectedly higher imports ahead on account of agriculture and food due to massive devastation of essential crops, they added.
The country’s current account and trade deficit are expected to widen further as the government is moving to import essential food items. The industrial activities have also been badly disrupted which will massively impact the exports of the country.
Pakistan’s trade deficit swelled 31 per cent on a month-on-month basis to hit $3.5 billion, data by the Pakistan Bureau of Statistics (PBS) showed.
According to data released by PBS, the petroleum group imports registered a 29.93 per cent growth in August 2022 on a month-on-month basis to stand at $1.86 billion compared with $1.43 billion in July 2022.
Pakistan’s petroleum group imports witnessed a growth of 6.97 per cent during the first two months (July-August) of the fiscal year 2023 and stood at $3.30 billion, compared with $3.08 billion during the same period of last fiscal year.
Likewise, the foreign exchange reserves of the country have also recorded a decline on the back of less inflows and higher imports.
The foreign exchange reserves held by the State Bank of Pakistan (SBP) fell $176 million to reach 8.62 billion during the week ended September 9, compared with $8.79 billion on September 2.
The overall liquid foreign currency reserves held by the country, including net reserves held by banks other than the SBP, stood at $14.31 billion. The net reserves held by banks amounted to $5.69 billion.
The country’s current account deficit rose 531 per cent to over $17 billion during the fiscal year 2022 due to massive increase in goods import bill. Overall, the current account deficit was $17.4 billion during the fiscal year 2022, compared with $2.8 billion in the fiscal year 2021, depicting an increase of $14.6 billion.
The local currency remained under pressure since the start of the current fiscal year. The rupee lost Rs34.06 or 16.62 per cent from Rs204.85 to dollar on June 30, 2022 to the current level of Rs238.91.
At the open market, the buying and selling of the dollar was recorded at Rs242.5 and Rs244.8 at 4:30pm PST.
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