In the intra-day trading in the inter-bank market, the rupee has depreciated to Rs169 against the U.S. dollar. Then it recovered slightly to close at Rs168.2.
The Forex Association of Pakistan President Malik Bostan in an interview with Express Tribune said, “This is the second time in recent months when the rupee depreciated to Rs169 against the US dollar in intra-day trading. Earlier, the rupee hit Rs169 at the end of March 2020.”
The rupee depreciated primarily due to the end of oil credit facility of Pakistan provided by Saudi Arabia, as per Bostan. Furthermore, he said that Pakistan has to pay back $1 billion to Riyadh. This has in turn pressurized the foreign currency reserves.
Bostan cited that as Pak officials are on a visit to Saudi Arabia he hoped that it will bring about a constructive outcome which might ease pressure from Pak rupee.
Bostan further revealed that when the oil credit facility got withdrawn in May, Pakistan just had one week of oil reserves left. This lead to fuel shortage in the next months.
He added, “Dollar is depreciating all over the world and it may fall significantly against the rupee in the near future.”
Pakistan-Kuwait Investment Company Head of Research and Development Samiullah Tariq said that major reason for the fall in rupee value was the rising of imports after the economic activity in Pakistan normalized.
Adding, “Latest data suggests that the current account was in surplus in June and the surplus exceeded the trade deficit of Pakistan.”