Pakistani rupee continues plunge to hit new all-time low against the greenback

KARACHI: The Pakistani rupee hit an all-time on Monday against the United States dollar to close at Rs170.79, amid rising imports and the flow of the greenback to Afghanistan. 
The rupee lost 31 paisas or 0.19 percent of its value in the interbank market. But the Pakistani currency appreciated by Rs0.30 in the open market, where the dollar was trading at Rs172.30 for selling and Rs172 for buying. 
Currency dealers attribute the slight fall of the greenback in the open market to a government’s crackdown against illegal currency exchangers. 
“Government has taken action against illegal currency operators which has appreciated the value of Pakistani rupee in open market,” Zafar Paracha, Exchange Companies Association of Pakistan general secretary, told Arab News. 
“However, in the presence of prevailing sentiment that the dollar is appreciating will only be cooled when the currency in the interbank market will appreciate against dollar because the open market takes cue from the interbank [market] and only action against illegal operators will not produce desire results.”
Analysts say the Pakistani currency is under pressure due to an increasing import bill and the flow of dollars to Afghanistan. 
“Pakistani currency is under pressure due to increasing imports and shortage of dollars in Afghanistan is also adding pressure to the Pak rupee,” Samiullah Tariq, a research director at the Pakistan-Kuwait Investment Company, told Arab News. 
Pakistan on Monday also released foreign trade data, which showed the country’s imports during the first quarter (July-September) increased by 65 percent on a quarterly basis as compared to the first quarter of the last fiscal year. 
The trade deficit stood at $11.66 billion during the first quarter, which is 101 percent higher than $5.8billion in the same period last year. 
Pakistan’s exports during the first quarter increased by 27.32 percent to $6.96 billion, according to data released by the Pakistan Bureau of Statistics (PBS). 
“This (exports) has been due to hard work of our exporters & they deserve praise for this accomplishment,” Abdul Razak Dawood, Prime Minister Imran Khan’s aide on commerce, said in a statement issued by the Pakistani commerce ministry. 
Analysts say the import bill is increasing mainly due to the increasing prices of commodities in the international market. 
“The prices of petroleum products, palm oil and other essential commodities have surged in the international market which is reflected in import bill,” Tariq said. 
The business community is concerned over increasing prices of imported commodities and the rising trend in imports. 
“The rupee has substantially depreciated which has made imports costlier, but this has not arrested the flow of imports yet,” Mian Zahid Hussain, the National Business Group of Pakistan chairman, said. 
But Tariq believed the demand of elastic imports would subdue in the coming days, when people start avoiding expensive imported goods.