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Pressure due to import payments and the government's reported inability to intervene resulted in the rupee falling further against the US dollar on Thursday with the local currency hitting the 240.5 level in the inter-bank market.
At around 12:10pm, the rupee was being quoted at 240.5, a depreciation of Rs4.48 or 1.9%, against the greenback during intra-day trading.
On Wednesday, the rupee had closed at 236.02, a day-on-day fall of Rs3.09 or 1.31%, as persistent political and economic uncertainty continued to add pressure.
Finance Minister Dr Miftah Ismail on Wednesday said government interventions in foreign exchange (forex) market cannot be made to control the rate of dollar in light of the commitment with the International Monetary Fund (IMF), Business Recorder reported, citing well-informed sources.
He maintained that pressure on forex is due to demand for payments against the import bill from last month, worth $7.5 billion. However, he assured the issue of US dollar rate and pressure on forex reserves will be alleviated and the exchange rate is expected to stabilise from August onwards.
Meanwhile, Pakistan posted a current account deficit (CAD) of $2,275 million for the month of June 2022, compared to a deficit of $1,637 million recorded during June 2021. A widening current account deficit adds strain on the currency.
Overall, the CAD was $17.4 billion in FY22 compared to $2.8 billion in FY21, depicting an increase of $14.6 billion in a year.
Meanwhile, the US Federal Reserve raised the policy rate by 75 bps in an effort to cool the most intense breakout of inflation since the 1980s.
Coming on top of a 75-basis-point hike last month and smaller moves in May and March, the Fed has raised its policy rate by a total of 225 basis points this year as it battles a 1980s-level breakout of inflation with 1980s-style monetary policy. This has added to the US dollar's strength against major currencies.
