Pakistani rupee hits record low on concern about US sanctions

ISLAMABAD: The Pakistani rupee plunged to another all-time low of Rs 170.48 against the United States dollar on Wednesday, mainly due to concerns that a US Senate bill seeking sanctions on the Afghan Taliban could be extended to Pakistan, dealers and analysts said.
The rupee lost 51 paisas, or 30 percent percent of its value, against the greenback as the demand for the dollar continued to build pressure, according to the central bank.
The rupee was trading at Rs 172.50 for selling and Rs 171.50 for buying in the open market on Wednesday, according to the Exchange Companies Association of Pakistan.
“The plunge appeared to be related to the US Senate bill seeking to impose sanctions on the Afghan Taliban and which could extend to Pakistan,” Dawn newspaper reported.
The bill, backed by 22 senators, also seeks to investigate Pakistan’s support for the Taliban over the past 20 years.
It is not clear what likelihood the US bill has of becoming law.
The dollar hit a high of Rs168.43 in August last year. Then it started declining and reached Rs151.83 on May 14, 2021. However, the greenback started rising once again and has appreciated by 6.6 percent and 9.9 percent since June and May 14, 2021, respectively.
The State Bank of Pakistan had indicated earlier that the dollar could appreciate during the current financial year due to an expected higher current account deficit.