Volatility emerged again in the foreign exchange market on Tuesday as the rupee depreciated Rs1.12 against the US dollar to Rs171.63 in inter-bank trading.
According to the State Bank of Pakistan (SBP), the currency had closed at Rs170.51 per dollar on Monday.
Earlier on October 28, the local currency dipped to an all-time low of Rs175.27 against the greenback owing to a deadlock in talks between Pakistan and the International Monetary Fund (IMF) over the resumption of $6 billion loan programme.
However, $3 billion financial assistance from Saudi Arabia coupled with the facility of oil supply on deferred payments worth $1.2 billion arrested the rupee’s slide and propelled it higher.
Alpha Beta Core CEO Khurram Schehzad stated that the rupee had been declining for the past two days, fuelled by uncertainty about the revival of IMF programme and the lack of clarity on that front.
Besides, surging inflation meant the country would increase imports of essential goods to stabilise prices in the local market and as a result dollar was in high demand, he said.
Moreover, the anticipation of increase in imported inflation has sparked panic buying of the greenback.
Published in The Express Tribune, November 10th, 2021.