Karachi September 14 2022: Pakistan Rupee depreciates in interbank for the ninth consecutive day to slip from one month low and trade nears 234 against dollar as the dollar rallied against the yen, euro and other currencies after stronger-than-expected U.S. inflation data boosted investor bets that the Federal Reserve will need to stay aggressive in raising interest rates.
The situation is already peculiar for Pakistan Rupee as Dollar shortages persists in the domestic market due to import of goods for flood relief and vegetables to meet shortages caused by devastating floods amid FBR decisigon to declare dollars on inbound flights.
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.
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.
Pakistan Rupee depreciates 1.48 or 1.0 percent in interbank to trade at 233.4 against the dollar at PST 12:15. In open market dollar is trading at 239 at PST 12:15, according to Forex Association of Pakistan.
“A large part of foreign currency supplies is going to the black market as illegal currency dealers as smuggler of goods have become active again across the border with Afghanistan and Iran” says Zafar Paracha General Secretary of Exchange Companies Association of Pakistan in an interview to local newspaper.
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.
The dollar rallied against the yen, euro and other currencies on Tuesday after stronger-than-expected U.S. inflation data boosted investor bets that the Federal Reserve will need to stay aggressive in raising interest rates. The dollar index , which tracks the greenback against its peers, was up 1.5% at 109.85 in its biggest one-day percentage gain since March 2020. It was still below last week’s two-decade peak of 110.79. The index turned positive after the data release.
