Rupee starts suffering again, falls to 170.74 a dollar

EA Report
Lahore, Oct. 11 — Despite SBP introducing various measures,
Pakistan’s rupee suffered a drop at opening week against USD, depreciating to 170.74 in the inter-bank market on Monday.
The rupee has been under pressure since May this year as a widening current account deficit and high import figures take toll on the country’s currency.
In August 21, the current account posted a deficit of $1,476 million, compared to a deficit of $814 million in July, as the import bill ballooned to over $6 billion.
According to State Bank of Pakistan (SBP), the PKR closed at 170.74 against the USD, a depreciation of 21 paisas or 0.12%. Last week, the PKR dropped to 170.96 against the greenback, the lowest level in its history, before staging a minor recovery.
Thin trading was witnessed in the market due to Columbus Day holiday in the United States, which leads to volatility,
In order to arrest the rupee decline, the SBP has introduced various measures including amendments in instructions for Exchange Companies to enhance transparency in foreign currency transactions and to curb the undesirable outflow of dollars.
Central bank has also imposed 100% Cash Margin Requirements (CMR) on import of 114 items, taking the total number to 525. Furthermore, it also revised Prudential Regulations (PR) for consumer financing to moderate demand growth in the economy.
The string of measures has led to a reduction in trading activity in the open market, as buyers are purchasing dollars using banking channels, said Malik Bostan, President Forex Association of Pakistan.
Pakistan’s rupee continues to strengthen against US dollar
He also urged the government to take measures to narrow the demand and supply gap.
On the other hand, the government has also intensified its crackdown against dollar hoarders, with Interior Minister Sheikh Rashid announcing on Monday that 88 people were arrested for hoarding US dollars across the country.
The minister added that the government has decided to conduct an audit of five exchange companies.

Economic Affairs