Pak Rupee has further weakened by o.45% or Rs0.71 against the US dollar on Thursday. Pak Rupee closed at 159.13 in the inter-bank market against the U.S dollar.
The rupee closed at Rs. 158.42 on Wednesday, as per the State Bank of Pakistan. With this latest depreciation in Pak Rupee, the four-day fall in rupee has reached 3.17% as it had been at 154.24 on Friday.
Forex Association of Pakistan President Malik Bostan said, “The main reason for the drop in rupee value is hot foreign selling (of government securities). As foreigners continue to sell the securities, the rupee is dropping and the dollar is rising.”
Furthermore, he said that Pakistan has started payments to foreigners as the three-month treasury bills are getting better. Foreigners are hesitant to reinvest money and many of them are pulling out. This is diminishing the value of rupee.
Furthermore, he said, “In addition to this, all regional currencies are falling and the rupee is following suit.”
Also, he said that rumors are circulating in the market that the State Bank will slash the key policy rate next week. This will prompt investors to pull out of their investments.
Bostan said that in the open market there is very limited demand and all the currency exchanges are taking place in the inter-bank market. He said, “There is no public buying of dollars.”
Even though there is no demand, the rupee went down by 0.5 points and closed at Rs.159 against the U.S dollar in the open market.
However, Bostan is hopeful that the rupee fluctuation will end and the currency will get back to its previous levels.