KARACHI – The Pakistani rupee on Wednesday further appreciated by 30 paisa against the US dollar and hit Rs159.75 in the interbank market.
In the open market, the local currency followed the similar trend and gained 40 paisa to hit Rs160 against the greenback
Yesterday, the rupee appreciated by 40 paisa against the US dollar in the interbank market, and hit Rs160.05.
In the previous week, the Pakistani rupee depreciated by 39 paisa against the greenback and closed at Rs160.58 in the interbank market on Friday.
In the open market, the greenback with slight fluctuation in the whole previous week maintained its value around Rs160.70.
The rupee has been observed to cumulatively depreciate against the US dollar, which in turn has resulted in increased prices of goods and hardships for the general public.
Earlier, the SBP let the rupee depreciate significantly in the inter-bank market after finalising an agreement with the International Monetary Fund (IMF) for a loan programme on May 12.
The IMF has asked Pakistan to end state control of the rupee and let the currency move freely to find its equilibrium against the US dollar.
On the other hand, the World Bank Group has also supported the idea of leaving the rupee free from state control in an attempt to give much-needed boost to exports and fix a faltering economy.
In previous weeks, the local currency has depreciated massively despite receiving the first tranche of $991.4 million from the International Monetary Fund (IMF).
The stringent conditions – on which the global moneylender has formally approved the bailout package of $6 billion for Pakistan – seem to have exerted more pressure on the local currency.
The gradual drop in the rupee had come due to high demand for the dollar against thin supply as the country continued to make aggressive international payments to partially pay off huge foreign debt and for imports.
Economists are of the view that effective measures must be implemented on the priority basis to recover the state from the balance of payment deficit.
Besides increased demand of the greenback in the local market, they have termed ‘balance of payments deficit’ as the main reason in the recent hike in the value of the US dollar.
Moreover, they consider that state’s exports and investment are required to grow significantly, and the imports must be reduced to remove pressure on the local currency.
According to experts, the government must ensure implementations on economic policies after the deal with the IMF.
It is anticipated that the US dollar rate would fluctuate for some time, and the value of the Pakistani rupee would stabilise after proper implementation of the economic policies.