Rupee plunges 30% to dollar in fiscal year 2021-2022

Rupee plunges 30% to dollar in fiscal year 2021-2022

KARACHI: The Pak Rupee (PKR) has recorded a massive decline of 30 per cent against the dollar during fiscal year 2021/2022, according to data made available to PkRevenue.com on Thursday.

The exchange rate witnessed a decline of Rs47.31 or 30 per cent from Rs157.54 on the start of July 01, 2021 to the closing of Rs204.85 on June 30, 2022.

READ MORE: Dollar slips to end at Rs205.12 in interbank

During the year the currency was under pressure due to higher economic demand, political instability and severe balance of payment crisis.

On Thursday the exchange rate witnessed an appreciation of 27 paisas to end at Rs204.85 against the dollar from previous day close of Rs205.12 in the interbank foreign exchange market. The rupee fell to the all-time low at Rs211.93 to the dollar on June 22, 2022.

The rupee has been recovering during the last two days after the country received $2.3 billion from Chinese banks. Furthermore, reports of finalization of agreement between Pakistan and IMF also supported the rupee. The country is expecting an inflow of around $1.9 billion from the IMF.

READ MORE: Rupee recovers sharply on expected IMF inflows

These inflows would help the State Bank of Pakistan (SBP) to improve its foreign exchange reserves. The rupee fell to the all-time low at Rs211.93 to the dollar on June 22, 2022.

The official foreign exchange reserves of State Bank of Pakistan (SBP) have decreased around 32-month low to $8.238 billion by the week ended June 17, 2022. The official reserves of the central bank fell by $747 million to $8.238 billion by week ended June 17, 2022 as compared with $8.985 billion by week ended June 10, 2022.

Previously, the foreign exchange reserves of the SBP were seen on November 01, 2019 when they were at $8.358 billion.

READ MORE: Rupee falls 46 paisas to dollar despite Chinese inflows

Considering the current official reserves of the State Bank at $8.238 billion, the import cover is only for 1.21 months.

The foreign exchange reserves held by the central bank witnessed a record high at $20.146 billion by the week ended August 27, 2021. Since touching the peak the central bank’s foreign exchange witnessed a continuous decline. The official reserves of the SBP fell around $11.91 billion by the week ended June 17, 2022 from touching the peak on August 27, 2021.

The total foreign exchange reserves of Pakistan have declined to around three-year low at $14.21 billion by the week ended June 17, 2022. Previously, the foreign exchange reserves of the country were seen at $14.259 billion by the week ended July 5, 2019. The country’s foreign exchange reserves have fallen by $733 million to $14.21 billion by week ended June 17, 2022 as compared with $14.943 billion a week ago i.e. June 10, 2022.

READ MORE: Dollar gains 25 paisas to PKR on forex reserves decline

The country’s foreign exchange reserves hit an all-time high of $27.228 billion on August 27, 2021. Since then the foreign exchange reserves have declined by $13.018 billion.

The rupee remained under pressure against the greenback during the current fiscal year. The State Bank of Pakistan (SBP) has taken various measures to support balance of payment and the local currency. However, the measures ended in a failure to help the rupee to recover losses.

The SBP on May 23, 2022 announced a sharp increase in policy rate by 150 basis points to 13.75 per cent from 12.25 per cent.

In addition to that the government announced a complete ban on imports to support balance of payment and help the rupee to stabilize. But all these measures appeared in failure as the exchange rate yet again deteriorated today massively.

Leave a Reply

You have to agree to the comment policy.