KARACHI: The rupee continued to fall on Monday, falling to Rs177.47 versus the US dollar, as the country’s large current account deficit, rising energy and oil costs, and financial market instability over the Russia-Ukraine war weighed on the local currency.
The rupee finished at Rs177.11 on Friday, according to the State Bank of Pakistan (SBP).
The $2.5 billion current account deficit, which is at an all-time high amid high global oil and other commodity prices, appears to be a major concern, as it is increasing the country’s reliance on foreign loans to meet its financial needs, particularly in a situation where imports are growing faster than exports.
The Pakistani rupee has depreciated by 12.65 percent (or Rs19.93) since the start of the current fiscal year on July 1, 2021, according to statistics issued by the central bank.
Despite the fact that the central bank has stated that there is enough financing available to fund the deficit and that foreign exchange reserves are at a comfortable level, a currency dealer stated that the foreign exchange market is concerned about the increasing pressure on the balance of payments.
Furthermore, the Russia-Ukraine crisis poses risks to the Pakistani rupee, as well as other global and regional currencies.
“In the next week, the rupee would be under pressure due to current account uncertainties and geopolitical turmoil.”