KARACHI: According to data from the Exchange Companies Association of Pakistan (ECAP), the Pakistani rupee crossed the 300 threshold as it traded at a historic low of $300.37 against the US dollar in the interbank market on Thursday.
As demand for the dollar surged as a result of the loosening of import restrictions and rising risks connected with financing the nation’s current account deficit, pressure on the local currency has intensified.
The currency dropped to 299.64 against the USD on Wednesday, down 0.21% from Tuesday’s close of 299.01.
According to Dr. Khaqan Najeeb, an expert in economics, the economy is experiencing a dollar liquidity shortage as a result of pressure from the release of already-parked containers as well as declining exports and remittances.
He claimed that the interbank market is also attempting to overtake the kerb market since Pakistan and the IMF agreed to a structural benchmark that calls for the two markets to have a disparity between them of no more than 1.25% on average over the course of five days.
“The open markets are likewise supply-limited, but demand is considerable since kerb markets meet the portion of imports not satisfied by the interbank market and because of the dollarization because many individuals tend to feel that dollar is a storer value and best to hold.”
The expert also noted that monetary policy has not yet had a significant impact on people’s desire to maintain the rupee.
He continued by saying that the best approach to ensure that the Pakistani rupee tends to stabilize is for inflows to rise at the interbank level.
“Also the certainty on the economic plan and the future planned inflows will also help as the next tranche may not be due in the coming months,” he said.
