Rupee continued to slide against dollar

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ISLAMABAD: The rupee continued to slide against the dollar on Wednesday, hitting another low of Rs236 in the interbank market. According to the Forex Association of Pakistan (FAP), the local currency fell Rs3.77 to Rs236.70 from yesterday’s close of Rs232.93 at 11:30am.

FAP chairman Malik Bostan highlighted that there was a need to increase dollar inflows as it would stabilise the rupee.

“The central bank should take strict measures against exporters who are not bringing back their proceeds to the country in due time,” he said.

He further stated that the local currency should be used for trade with Afghanistan as it would save $2 billion in foreign exchange.

Presently, Bostan continued, Pakistan’s inflows were short. “In such a situation, the transfer of $2 billion to Afghanistan [for imports] is increasing our difficulties,” he added.

Meanwhile, Mettis Global Director Saad Bin Naseer was hopeful that the pressure on rupee would ease in the upcoming sessions ahead of inflows from the International Monetary Fund (IMF) and friendly countries

“Demand from importers has fallen significantly during July,” he said.

“As per the finance minister, total imports so far during July (as of July 25) have reached to only $3.7bn. This will alleviate demand-side pressures significantly and may even keep the current account balance in surplus for July,” he added.

The dollar has come under renewed pressure amid higher demand from importers. Bankers say the “import mafia” has practically drowned the national economy and is still insisting that more imports be allowed while the country is already on the brink of default.

Between April 7 (when the then-prime minister Imran Khan was ousted from power) and July 22, the rupee lost 21.3 per cent value against the US dollar both due to the yawning trade deficit and the growing political instability and uncertainty.

The rupee had appreciated to Rs204.56 in the first week of July after touching 211.93 on June 22. It then kept losing its value against the dollar but registered a minor appreciation when the country reached its staff-level agreement with the IMF on July 15.

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