Weakening economy and deficit weigh on Pak rupee
dubai — Maintaining its downward trend, the Pakistani rupee fell to all-time low again on Thursday against the UAE dirham, which continued to strengthen against other Asian currencies as well.
The Pakistani rupees hit 35 against the dirham, losing its value by two rupees in less than one week due to strengthening dollar and weakening economy of Pakistan.
The roaring dirham has been gaining against Indian rupee as well, surging to all-time high of 18.80 on Thursday.
In the last eight months, the Pakistani rupee has fallen by around 20 per cent as the State Bank of Pakistan devalued the currency four times by approximately five per cent.
Analysts have attributed Pak rupee’s persistent weakness to balance of payment crisis, falling foreign exchange reserves, political uncertainty ahead of July 25 elections and strong demand for dollar from pilgrims going for Haj.
As reported by Khaleej Times earlier, the rupee weakness will continue due to worsening fiscal position and the government has to approach the IMF for a bailout. Analysts believe that the IMF has been instructing the government not to intervene in the currency market and let the rupee settle on its own ahead of any bailout package.
Sudhesh Giriyan, COO, Xpress Money, had earlier told this newspaper that the rupee would remain under pressure during the second-half of this year and rupee hitting 38 against dirham this year is “definitely possible.”