KARACHI, Aug 23(ABC): The Pakistani rupee continued to lose ground against the US dollar during Tuesday’s intraday trade in the interbank market as the country faces a currency shortage.
The local unit was trading at 217.70 after losing 1.05 against the greenback following a currency crunch, which according to analysts is taking place due to the new rules imposed by the United Arab Emirates, smuggling, and the lifting of the import ban.
The UAE has made it mandatory for Pakistani travellers to declare 5,000 dirhams at the airport when landing — leading to an increase in the price of the US dollar in the open market.
Economist and former adviser to the federal ministry of finance Dr Khaqan Hassan Najeeb said the rupee is slipping not only because of the dollar’s global strengthening but also due to recent political developments — causing jitters in the market.
He also cited depleting foreign reserves held by the State Bank of Pakistan (SBP) as a reason for the fall. Forex reserves stand at $7.8 billion — hardly enough for over a month of imports.
Exchange Companies Association of Pakistan (ECAP) General-Secretary Zafar Paracha told Arab News that the local unit’s fall — among other reasons — was due to its smuggling to Afghanistan, where sellers get higher rates.