Rupee touches new all-time low within hours

SBP injects $1.2bn to stabilise local currency

The Pakistani rupee on Wednesday continued its slide against the greenback, touching a new all-time low for the second straight day at 169.5 in the interbank market at the onset of trading session.

The local currency had closed at an all-time low value of Rs168.94 a day earlier, on Tuesday.

The rupee depreciated by 45 paisa against the greenback and was being quoted at 169.10 to 169.50 while trades were reported at 169.50.

The rupee, which has been termed the worst-performing currency in Asia, seems to have opened the field for the bullish US dollar to move forward unchecked and erode the remaining value of the local currency, maintaining downturn since it touched a 22-month high of Rs152.27 in May 2021, losing a cumulative Rs17.36 in the past four months.

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The rupee has been losing purchasing power fast in the domestic market as well, causing inflation that has badly hit the general public.

It may be recalled that import payments soared to a historic high of around $6.4 billion in August whereas export earnings remained sluggish at around $2.2 billion a month.

Meanwhile, the State Bank of Pakistan (SBP) pumped $1.2 billion into the inter-bank market in three months to defend the weakening rupee but could not stop the local currency from falling to a historic low, highlighting the cost of expansionary policies without fixing the structural economic flaws.

A report by The Express Tribune pointed out that the $1.2 billion injection into the forex market is contrary to the stated policies of the central bank, International Monetary Fund (IMF) and finance ministry, as all the three institutions claim that the rupee value is determined by market forces.

With the fresh injection, at least $5.8 billion has been thrown in the inter-bank market during the tenure of Pakistan Tehreek-e-Insaf (PTI) government to maintain an artificial value of the rupee.

The official record showed that from July 2012 to July 2013, the central bank pumped $3.43 billion into the interbank market.

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