Rupee is unable to extend its previous gains, and it is currently trading at Rs223.81 to a dollar. This is a six-week low.
KARACHI:
On Wednesday, the Pakistani currency was unable to maintain the small gains it had made against the US dollar the previous day, and it resumed its downward trend in response to the increased demand for the greenback caused by increased payments for imports and repayments of foreign debt.
In the inter-bank market, the value of the rupee decreased by 0.17%, which is equivalent to Rs0.39, and reached a six-week low of Rs223.81 per dollar.
The priority that the government has placed on gradually loosening its administrative control over imports has continued to drive up demand for the dollar.
The nation’s central bank stated one week ago that it was committed to clearing all import payments of up to one hundred thousand dollars each. Earlier, it had capped the amount of money that could be spent on import orders at $50,000.
In addition, the rapidly approaching date for repayment of the maturing $1 billion Sukuk (a Shariah-compliant bond), which is scheduled for December 5, 2022, was playing on the minds of traders, and it forced them to buy dollars in order to make advance arrangements for the payment of imports.
On Tuesday, the value of the currency had partially rebounded, increasing 0.11%, or 0.24 rupees, to 223.42. A low current account deficit of $567 million was recorded in October, which was one-third of the $1.72 billion deficit that was recorded in the same month of the previous year. This recovery occurred against the backdrop of this low deficit.