The rupee fell for the second day in a row against the dollar and hit an all-time low and touched Rs 221 in the interbank market.
According to the Forex Association of Pakistan (FAP), the greenback rose by Rs 5.8 to Rs 221 at around 12:00 noon against the previous day’s Rs 215.20.
Metis Global director Saad bin Naseer said that the rupee is seeing depreciation due to “terrorist buying”. [of the dollar] by banks in the interbank market”.
He said that “there is panic in the financial markets after the fear of change”. [the] Punjab and government at the Centre” followed by by-elections to 20 seats in the province. The bypolls saw PTI register a landslide victory against the PML-N, which leads the ruling coalition.
He further said that the downgrading of Pakistan’s outlook from stable to negative by Fitch rating agency added to the panic in the market.
In addition, he said, dollar demand among importers had also “increased” as the future of inflows from the International Monetary Fund, friendly countries and bilateral sources remain a matter of concern.
FAP President Malik Bostan slammed banks more when asked about the freefall of the rupee.
He alleged that the banks were using the political situation in the country as an “excuse” and “satta bazi(speculation) in the money market.
“State Bank should take note of this and immediately ban the forward booking of dollars so that unnecessary increase in the value of greenbacks in the market and end the monopoly of banks,” he said.
This, he said, will end the “panic” in the market.
Komal Mansoor, head of research at the web-based terminal for financial markets, said: “The floor for the rupee has disappeared. this is absurd.”
She said the central bank should intervene to stabilize abnormal movements, “otherwise risk exposure to all other aspects of the economy”.
After reaching a peak of Rs 211.93 on June 22, the dollar started falling for some time and fell to a low of Rs 204.56 on July 4.
However, later the rupee strengthened $2.3 billion sugar flow evaporated within a few weeks, as the dollar broke the rising streak of the rupee and received 2.38 in the interbank market on July 5, the first appreciation in the new financial year.
Since then, the greenback has continued to rise, with a slight reversal of the trend on IMF day on July 15. announced It had reached an employee-level agreement with the government. However, the rupee reversed its gains the very next day, with analysts attributing it to lower inflows and import payments.
was in dollars on monday informed of Record one-day appreciation in the interbank market from Rs 210.95 to Rs 215.20.
In the first session, the greenback rose to Rs 217 but gradually came back to the level indicated by SBP. However, the exchange companies said that it closed at Rs 216.20.
more to follow