Home / Financial Services/ Pakistan rupee slumps 3.8%, in apparent fresh devaluation

Pakistan rupee slumps 3.8%, in apparent fresh devaluation


Comments / {{hitsCtrl.values.hits}} Views / Tuesday, 12 June 2018 00:21


KARACHI, Islamabad (Reuters): The Pakistani rupee slumped 3.8% against the dollar on Monday before slightly recovering in what appeared to be the third currency devaluation in seven months by the central bank, traders said, as Pakistan faces a balance of payments crisis.

At 0830 GMT, the rupee was at 119.25 per US dollar after opening at 115.63. Earlier in the day, it had traded close to 120 per dollar, currency traders said.

“It was expected. So far no intervention seen by State Bank. It is expected that the central bank’s intervention may come soon just to keep the dollar within the rage of 120,” Fawad Khan, Head of Research at BMA Capital, said.

A spokesman for the Central Bank didn’t respond to Reuters’ request for comment.

In December and in March, the rupee was devalued, each time by about 5%, by the Central Bank.

Pakistan’s economy is expanded to expand by close to 6% this year, the fastest pace in more than a decade, but a widening of the current account deficit has fuelled speculation the country will need its second International Monetary Fund (IMF) bailout since 2013.

The current account deficit now stands at $14 billion, around 5.3% of gross domestic product, a State Bank of Pakistan official said.

The economic outlook has been hurt by the fast depletion of Pakistan’s foreign currency reserves, which now stand at just over $10 billion, or two months’ worth of imports.

Pakistan is currently in discussions with China for loans to ease pressure on its foreign currency reserves.

Over the weekend, the shortage of foreign currency widened the spread at which the rupee is traded in the open market and the interbank market to four rupees.


Share This Article


DISCLAIMER:

1. All comments will be moderated by the Daily FT Web Editor.

2. Comments that are abusive, obscene, incendiary, defamatory or irrelevant will not be published.

3. We may remove hyperlinks within comments.

4. Kindly use a genuine email ID and provide your name.

5. Spamming the comments section under different user names may result in being blacklisted.

COMMENTS

Today's Columnists

Great ‘Gamperaliya’: A great novel made into a great film by a great director

Saturday, 23 June 2018

‘Gamperaliya’ (Changes in the Village/Changement au Village) was the third feature film made by ace director Lester James Peries. It was released on 20 December 1963.The film was based on the famous novel of the same name written by the doyen of


Confusion in Maldivian opposition is to Yameen’s advantage

Saturday, 23 June 2018

The ongoing confusion in the ranks of the Maldivian opposition, barely three months before the presidential election, works to the advantage of the incumbent President and candidate of the Progressive Party of the Maldives (PPM), Abdulla Yameen.


Implications of inward FDI on China: Lessons to be learnt

Saturday, 23 June 2018

China overtook the United States to become the largest trading nation in the world in 2014. China is the second largest economy in the world behind the United States and the largest exporter in the world. It is referred to as the factory of the world


22 June 1941: Operation Barbarossa

Friday, 22 June 2018

When Adolf Hitler founded his Third Reich in January of 1933 there was a decisive ‘quickening’ of history towards the cataclysmic


Columnists More