The Pakistani rupee continued its slide on Wednesday, hitting another life-time low against the US dollar and the UAE dirham.
The Pakistani currency dropped by another 7.2 rupees to 164 against the greenback (44.68 against the UAE dirham) in the interbank trading on Wednesday. It has been the worst performing Asian currency, losing 35 per cent in the last one year and 17.6 per cent year-to-date. In the last one month alone, it lost 9 per cent.
The rupee has been consistently falling due to widening trade deficit, dwindling foreign exchange reserves and free-float exchange rate mechanism agreed with the International Monetary Fund (IMF) to determine market value of the currency. The central bank is unable to support the rupee as its reserves are on the decline due to debt payments.
Bilal Moti, managing partner, Windmills Group, said the rupee's massive depreciation against the dollar is a representation of country's reserves, balance of payment, debt position and GDP levels.
"Its impact on Pakistan's highly import driven economy is exorbitant. The inflationary repercussion on general public is also phenomenal. USD-PKR rate may even go higher in the short term. However, It is likely to find an optimal economic equilibrium soon with government rigorous measures on improving tax collection, productivity and exports expansion," Moti said.
Salman Shakil Shaikh, a UAE resident, said the rupee's decline is good news for expatriates as they will get higher rates for remittances, but it's not good for the country.
Muhammad Aslam Khan, a Sharjah resident, said Pakistanis remittances are increasing due to decline in rupee's value, but at the same time, inflation back home is increasing to alarming levels.
Pakistanis to Declare over $6 Billion of Assets in Foreign Countries
Qatar Helps Pakistan With $3 Billion Bailout Package
By Waheed Abbas
Copyright © 2021 Khaleej Times. All Rights Reserved.