KARACHI, June 03(ABC): The Pakistani rupee on Friday reversed the momentum as it shed 0.17% to close at Rs197.92 against the US dollar in the interbank market owing to concerns regarding widening trade deficit and depleting foreign exchange reserves.
According to the data released by the State Bank of Pakistan (SBP), the local currency closed at Rs197.92 compared to Rs197.59 recorded a day earlier.
The decline comes on the back of a widening trade deficit — which peaked at $43.33b during the 11 months (July-May) of the outgoing fiscal year — and depleting foreign exchange reserves that dropped to levels worth just six weeks of imports — their lowest since December 2019.
A day earlier, the central bank revealed that the reserves held by the SBP fell to $9.723 billion, below the closely watched $10 billion level, on May 27.
Today’s decline was attributed to higher dollar demand from importers that pushed the US currency higher.
Since the beginning of this fiscal year (July 1, 2021) to date, the rupee has collectively dropped by a massive 25.63% (or Rs40.38) compared to the previous fiscal year’s close at Rs157.54.
The rupee has maintained a downward trend for the last 13 months. It has lost 29.97% (or Rs45.65) to date, compared to the record high of Rs152.27 recorded in May 2021.