The devaluation of Pakistani rupee continues, and this time it is against the UAE dirham. On Thursday Pakistani rupee hit all-time low and reached Rs 35 against the dirham. The currency lost its value by two rupees in less than a week. As the dollar is strengthening, Pakistani and Indian currency is falling down. However, UAE dirham has strengthened against all other Asian currencies. Indian rupee also reached all-time to low against UAE’s dirham and reached 18.80 on Thursday.
As the State Bank of Pakistan has devalued Pakistani currency for at least 4 times by approx. 5%, Pakistani rupee has gone down by 20% in past 8 months.
Reasons given for the devaluation of Pakistani Rupee against the dollar and other currencies are:
- The balance of payment crisis
- Declining foreign exchange reserves
- Political uncertainty before Pakistan’s General Elections on July 25th
- High demand for dollar from Pakistani pilgrims going to Saudi Arabia for pilgrimage
It seems that the rupee will continue to weaken against dollar and dirham due to a terrible fiscal position. The government will have to approach the International Monetary Fund (IMF) for a bailout. But as per experts, IMF has asked the government to let the rupee settle on its own and not interfere as of yet.
Sudhesh Giriyan, COO, Xpress Money claimed that the rupee will continue to weaken in the second half of 2018 and may reach 38 against the dirham.
Pakistan Forex Association President Malik Bostan said, “The open market trade was affected as buyers and sellers have resorted to staying on the sidelines for clarity on the rupee-dollar parity.”
We informed our readers earlier that the devaluation of rupee against the dollar and other currencies will affect the overall economy of Pakistan. Fuel prices will be increased, car prices will be raised yet again leading to other major issues.