The rupee kept slumping against the US dollar as the local unit lost 8 paisa in its value in the interbank trading on Friday. As per the information received by the money market today, the value of US dollar appreciated by 8 paisa, pushing its exchange rate at Rs224. Thursday, the US dollar was closed at Rs223.92 with Pakistani currency depreciated by 0.05%. The local unit is slumping on account of a differential between the US dollar rates in the open market and interbank trading.

The high rate of the USD in the open market is creating a grey market while the exchange companies are facing a dearth of dollars. The USD rate in grey market is higher by Rs20-30 per dollar as compared to the interbank rate. Besides this, another factor which is affecting the rupee rate is the speculation that the IMF would subject the release of its next tranche to fresh conditions. Pakistan’s official foreign exchange reserves have also fallen by $134 million to $7.826 billion by week ended November 18, 2022 as compared with $7.96 billion a week ago.

The decrease in foreign exchange reserves is attributed to external debt repayment, the statement issued by SBP read. The market is also jittery over the fact that country’s foreign exchange reserves have declined to meet only one and a half months cover for import payment. In order to stem the dollar outflow, the State Bank on Thursday made it mandatory to open an account before buying $2,000 or above. Today, the central bank is announcing monetary policy in which it is expected that the bank would keep the policy rate unchanged at 15% to slow down the economy and contain inflation.

Credit: Independent News Pakistan-INP