Karachi September 19 2022: Pakistan Rupee depreciates in interbank for the twelve consecutive day to trade nears all time low against dollar due to significant demand of dollar for import of vegetables to meet local demand as rollover of USD 3 billion deposit facility for one more year fails to uplift investor sentiment.
The dollar lingered near a two-decade top on major peers on Monday, ahead of a week loaded with market holidays and central bank decisions from Washington to London and Tokyo.The dollar index , which measures the currency against six counterparts, was 0.2% stronger than Friday at 109.84, consolidating after a volatile couple of weeks that took it as high as 110.79 on Sept. 7 for the first time since mid-2002.
Pakistan Rupee depreciates 1.08 or 0.5 percent in interbank to trade at 237.92 against the dollar at PST 11:45. Pakistan Rupee depreciates 8.41% or 19.62 since start of this month. Pakistan currency hit low of 239.94 on 29th July 2022 on uncertainty of IMF program.
In open market, Dollar is trading at 241 against rupee at PST 11:45, which was almost the same as of Thursday.
Saudi Fund for Development (SFD) has confirmed rollover of $3bn deposit maturing on 5th December 2022 for one year. Deposit is placed with SBP and is part of its forex reserves.
Pakistan’s Finance Minister Miftah Ismail has stated while speaking to business community that there is still much pressure on the dollar which will not allow us for opening of LCs for imports.
“The average banks’ buying per week was around two to four million dollars, which has now gone up to $12m on an average,” said Malik Bostan, the chairman of the Exchange Companies Association of Pakistan (ECAP).
Minister for Planning, Development and Special Initiatives Ahsan Iqbal Sunday said that the foreign aid being received for the flood victims in the country could help stabilize the Pakistani Rupee.
However, SBP clarified that there is no restriction on the import of raw material for any industry including export-oriented industry. It is further clarified that SBP has advised banks to seek prior permission before initiating transactions for import of Motor Cars (CKD), Mobile Phones (CKD) and machinery.
On August 16 2022, CAA order required all incoming international flights to ensure that all passengers disclose their foreign currency possessions through a pro forma and that airlines submit all these declarations to the CAA. State Bank of Pakistan Deputy Governor Dr Inayat Hussain said before the senate that this was one of the reasons for recent pressure on the rupee.
Recent floods have brought unprecedented crop damage. As a result, the prices of onion and tomatoes have sky-rocketed in the local markets. In order to alleviate the sufferings of the people due to abnormal price hike, the Prime Minister of Pakistan ordered urgent relief measures to ensure an uninterrupted supply of onion and tomatoe in the local markets. Elimination of all taxes and duties in procuring the two vegetables by import will help reduce their prices.
To control exchange rate in Open Market SBP has decided that effective September 7, 2022, Exchange Companies shall seek prior approval from SBP for such export of USD currency notes and the Intended date should not be beyond two days from the date of request submission.
