Pakistani rupee hits historic low of Rs301 as market demand for US dollar surges

KARACHI: Pakistan’s national currency closed the weekend trading session on a historical note, hitting an all-time low of Rs301 against the US dollar in the interbank market, with the rising demand for greenback among the business community for import payments building pressure on the local currency.
The Pakistani rupee lost its value against the US dollar by Rs3.87 or 1.3 percent during this week, according to the central bank data.
“The pressure on rupee continues to build as demand for dollar to pay letters of credit (LCs) remains on the higher side after the government removed restrictions on imports,” Zafar Sultan Paracha, General Secretary of the Exchange Companies Association of Pakistan (ECAP), told Arab News.
He maintained the current situation was encouraging grey- and black-market trading while urging people to avoid unnecessary buying of dollars “in the larger interest of the country.”
Paracha said the currency was also under pressure due to fears of further energy rate hikes by the current caretaker administration of the country which is thought to have very little political stake in the system.
The Pakistani rupee has lost its valued by Rs12.51 or 4.3 percent in the interbank market since the departure of the previous coalition government of former prime minister Shehbaz Sharif earlier this month.
The country’s stock market closed marginally lower on Friday due to concerns around weaker national currency.
The benchmark KSE100 index shed 79 points to close at 47,671 level at the end of the week on Friday.
“The Pakistani stocks closed lower amid investor concern for weak rupee and dismal economic outlook,” Ahsan Mehanti, CEO of Arif Habib Corporation, said.
“Falling exports and inflation worries amid surging power tariff and falling rupee played a catalyst role in the bearish close,” he added.