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Bridging The Gap
Rupee closes at all-time low of 139.05 in inter-bank market
  Friday 30 November, 2018
Rupee closes at all-time low of 139.05 in inter-bank market

The rupee weakened 3.8% and closed at an all-time low of Rs139.05 to the US dollar in the inter-bank market on Friday.

In early hours of the day, the rupee hit an intra-day record low of Rs144 to the greenback in line with the International Monetary Fund (IMF) conditions.

This was the sixth round of rupee depreciation since December 2017. On Thursday, it had closed at Rs133.99.

Cumulatively, the rupee has dropped 31.8%, or Rs33.55, on closing basis in the last 11 months.

The fresh devaluation in rupee is seen ahead of expectations of the central bank increasing the benchmark interest rate by one percentage point to 9.5%. The bank is due to announce the monetary policy today.

The IMF recently proposed that Pakistan devalue its currency to Rs145-150 to the greenback, as the country was in talks with the international financial institution for a bailout package.

“Yes, IMF conditioned rupee devaluation. The fact of the matter is that there was no other option left, but to devalue the rupee to avoid default on international payments,” said Pakistan Forex Association President Malik Bostan.

He said Pakistan has received a sluggish response against its efforts to acquire a soft loan from friendly counties to avoid IMF bailout and the default too.

The situation left no option but to devalue currency to avoid default on import payment and debt repayment. Pakistan is to pay around $9 billion in debt repayment by June 2019.

On the other hand, its foreign currency reserves continued to stand near and around the recent four-year low at $8.06 billion as on November 23, 2018, despite the fact that Saudi Arabia has parked $1 billion in the reserves.

Riyadh would park another $2 billion in the next two months under its friendly financial package worth $6 billion ($3 billion in cash and a credit line of another $3 billion for the supply of petroleum products to Pakistan).

Bostan said open market is strictly following the inter-bank for buying and selling dollar at retail counters.

Source: https://tribune.com.pk/story/1857300/2-rupee-hits-record-low-us-dollar-rs142-inter-bank-trading/

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