Rupee sinks further, falls to new low of 178.17

Monetary policy tightening pushes rupee to historic low of 177.98

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Karachi: The rupee fell to 177.98 against the US dollar on Wednesday as the central bank was unwilling to intervene in the foreign exchange market to slow the pace of currency devaluation.

On Tuesday, according to data released by the National Bank of Pakistan (SBP), the rupee closed at 177.88 against the US dollar in the interbank market.

Currency dealers said a continual surge in the dollar demand for import payments weighed down on the local unit. Inflows, which were available in the market, were not sufficient to cover the demand side.

“There was a mismatch between the demand and the supply of the greenback. The central bank refrained from intervening in the market to lend support to the currency,” said a forex trader.

Traders were awaiting the announcement of the Monetary Policy Committee meeting where the central bank raised the policy rate by 100 basis points to 9.75%, which was largely in line with the market expectation.

The rupee has maintained a downtrend for the past seven months. It has lost 16.88% (or Rs25.71) to date, compared to the 22-month high of Rs152.27 recorded on May 14.

 

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