Commerce Reporter
The rupee, which has been falling against the dollar since Sept 2, lost another Rs1.07 in the interbank market on Monday.
The PKR closed at Rs237.91 per dollar — a depreciation of 0.45 per cent, according to the State Bank of Pakistan.
Saad bin Naseer, director of financial data and analytics portal Mettis Global, said the decline was reflective of the overall demand and supply situation in the market. The rupee did not react to news of the Saudi Fund for Development rolling over a $3 billion deposit for a year because the development “did not improve the liquidity of the dollar in the market”, he added.
Naseer said the government would have to step in to stop further decline in the rupee’s value. He recommended that the government decrease the time period given to exporters to bring their proceeds into the country.
Many exporters hold their payments abroad, anticipating that the greenback’s value will rise in Pakistan, at which point they will bring back their money. This often exacerbates dollar shortage in the country.
Naseer also urged the government to “ensure the exchange rate is fixed for exporters on the day they realise their proceeds”, a step that will discourage them from holding on to dollars for longer periods in anticipation of making profit on exchange rate fluctuation.
Meanwhile, FAP Chairman Malik Bostan said the rupee was under pressure in the interbank market due to oil payments and opening of letters of credit for import.
He said the pressure on the PKR could ease if friendly countries gave the $4 billion they had promised earlier. “Saudi Arabia has rolled over the $3bn deposit for a year. The IMF (International Monetary Fund) has also assured help after the flood devastation. The ADB (Asian Development Bank) is expected to give $2bn.
“If these commitments are timely fulfilled, the rupee can stabilise,” he commented. He warned, however, that if crude oil prices rose in the international market, it would put pressure on the economy.
Bostan urged the government to stop the import of non-essential and luxury items.
According to Mettis Global, the PKR lost Rs8.7 against the greenback last week.
The local currency’s value has declined 28.99pc during the last 52 weeks. It had reached a record low of 239.94 on July 28.
