The Pakistani rupee fell by Rs1.56 against the US dollar in the interbank market on Thursday and closed at Rs235.88 after depreciating 0.66 percent.
On Wednesday, the rupee closed at Rs234.32 per dollar.
Exchange Companies Association of Pakistan (Ecap) General Secretary Zafar Paracha said there was a “lot of pressure” on the rupee because friendly countries, who had promised to give money, have not done so due to which sentiments have changed.
“The smuggling of dollars and goods to and from Afghanistan and Iran is at its peak,” he said.
Paracha attributed the rise in smuggling to the government’s decision to impose heavy regulatory duties on the import of non-essential and luxury items and added that it had led to pressure in the open market while dollars in the interbank market had “nearly dried up”.
“Exchange companies which sold between $25-30 million a day are not able to sell as much at all now. We are making efforts to ensure that the dollar rate does not rise beyond Rs240 in the open market but the rates in the interbank and grey markets are going up,” he rued.
The Ecap general secretary said the government had imposed further rules and regulations on exchange companies after which people were not coming to ECs and were instead going to the grey market.
“The dollar is being sold informally instead of formally. The greenback is being sold at Rs248 in Peshawar and Rs250-252 in Afghanistan.”
Paracha also criticised the government for “not paying attention and controlling expenditure”.
Pakistan was not receiving the required amount of aid because of what he termed a “trust deficit”.
The market’s sentiments had changed due to the political situation and talks about default had restarted, he said.
Meanwhile, Topline Securities CEO Mohammad Sohail said the rupee would remain under pressure until Pakistan’s current account deficit was reduced or inflows were received from friendly countries.
“Considering global financial conditions, getting funds on commercial basis and through Eurobonds is not possible,” he commented.
“Fundamentals are clear and were already not up to the mark but luck is not with us. The devastation caused by floods further shattered the hope of recovery anytime soon,” said Mettis Global director Saad bin Naseer.
Alpha Beta Core CEO Khurram Schehzad shared a similar view. “The dollar going up is mostly due to global strengthening against major currencies. Floods at the local end are adding more pressure to PKR due to expectedly higher imports ahead on account of agriculture and food due to massive devastation of essential crops.”
This is the 10th consecutive session that the rupee fell. Over the last nine sessions, it fell Rs15.72 or 6.91pc, according to Arif Habib Limited.