Pakistan has been running on trade current account deficit for past years. Canadian study says oral medicine effective in treating Covid-19, Some COVID-19 mutations may dampen vaccine effectiveness. The episodic jolts in the rate of dollar in Pakistan, signaled towards alarming economic conditions of the country. The rupee which has maintained a level of Rs 70 for the last two years has depreciated to Rs 76.15 levels in just three months. Why Indian Rupee is Falling Against The US Dollar The Indian rupee experienced one of the most pronounced declines in 2018 where the currency has lost 8% of its value. We take a look at reasons why Indian rupee has been falling against the US dollar. In today’s session, the currency got some relief after the good GDP numbers but failed to sustain and fell to an all time low levels. It means that Pakistani currency has fallen by more than Rs21 against one dollar in just over a month. The US dollar has gained Rs7.46 in the past three days. The continued borrowing would also trigger further imbalance turning the Pakistani economy fragile. The domestic unit finally ended 2 paise higher at 72.97 against the US dollar, marking its fourth straight session of gains. All rights reserved. VACATIONS The falling rupee is bad news for itinerant Indians and vacationers to a foreign country. Devaluation – a recipe to economic stability or economic disaster? Tags: rupee falling dollar raising rupee falling against dollar why rupee valus is falling It was only limited to a particular time after which SBP was unable to keep up with the over-valued rate of exchange. Bilal Moti, managing partner, Windmills Group, said the rupee's massive depreciation against the dollar is a representation of country's reserves, balance of payment, debt position and GDP levels. Amidst the current currency devaluation fiasco, there are two different types of opinions which came on the scene. (WebDesk) - The Pakistani rupee has experienced a worst fall ever against US dollar. Can COVID-19 vaccines be mixed and matched? Meanwhile, more Pakistani expatriates are rushing to banks and money exchange houses in the UAE to remit money back home in the wake of record fall in Pakistan rupee against US dollar. The Pakistani rupee continued its slide on Wednesday, hitting another life-time low against the US dollar and the UAE dirham. A National Communications Services Company. USD-PKR rate may even go higher in the short term. In the last four business days, the dollar has risen by Rs9.60 against the Pakistani rupee. The rupee has been consistently falling due to widening trade deficit and an agreement reached with the IMF. Muhammad Aslam Khan, a Sharjah resident, said Pakistanis remittances are increasing due to decline in rupee's value, but at the same time, inflation back home is increasing to alarming levels. Copyright © 2021. The central bank is unable to support the rupee as its reserves are on the decline due to debt payments. macro_action: article, Analysts predict the dollar to go further up before settling somewhere around Rs130. The rupee fell to 75.31 against the dollar … Also Read: Dollar closes at Rs128.26 Analysts predict the dollar to go further up before settling somewhere around Rs130. In last week, the foreign exchange reserves of Pakistan increased by $268 million. All Rights Reserved. Here’s the brief reflection on the Pakistan’s currency devaluation topic to understand the current situation. The contemporary situation has given rise to the debates of why the rupee has experienced such great fall and are the current situation of our economy really worrisome. The Pakistani currency dropped by another 7.2 rupees to 164 against the greenback (44.68 against the UAE dirham) in the interbank trading on Wednesday. In January, the dollar was trading at Rs110.7 against one rupee but since then it has increased 15.6%, reaching an all-time high of Rs128 on Monday due to pressures on the country’s external front. 4.08 in the last few months (June 30th to October 7) to Rs. Since December 2017, the rupee has experienced devaluation of over 33 percent against the US dollar and in the last three weeks alone, it has cumulatively dropped Rs2.25 or 1.6 percent. Economists and Pakistani analyst have been quoted saying that the current situation of national currency would not cause any panic in the market. This fall comes before the expected signing of a bailout agreement with the International Monetary Fund. The India rupee is down 1.82 per cent against the US dollar year-to-date. The UAE is Africa’s fourth-largest global investor with an... READ MORE, Abu Dhabi Sustainability Week 2021 consists of a series of high-level ... READ MORE, The acquisition will be another step towards cementing Agthia’s ... READ MORE, Natural gas will play a leading role in national energy strategies... READ MORE, Those who have already received the first dose and are awaiting their ... READ MORE, The employee had helped a Dubai-based journalist as her Metro card... READ MORE, UAE set to be biggest beneficiary of rapid vaccination rollout, say... READ MORE, More than 24.2 million tests have been carried out. In the middle of currency’s depreciation period, many views are coming forth. This strengthens the dollar and that leads to another reason why the rupee is falling against the dollar. The IMF has long advocated Pakistan to loosen its grip on the rupee, and estimated the real exchange rate was overvalued by as much as 20 per cent in 2017. New Delhi: The Indian rupee continued to drop against the US dollar on Thursday with the Indian currency falling to a record low of 69.09 against the greenback.The currency has cracked over 8% in this year so far emerging as the worst performing currency among its Asian peers. The rupee fell sharply against the US dollar today to register a new low as the greenback continued its rally against other global currencies. The Indian Rupee is not taking halt against US dollar, falling continuously to touch the lifetime low of 71.10 against the greenback. In January, the dollar was trading at Rs110.7 against one rupee but since then it has increased 15.6%, reaching an all-time high of Rs128 on Monday due to pressures on the country’s external front. They consider that situation can be devastating for Pakistan’s economy in the long-run. Over continuous devaluation of the currency, stake holders expressed deep concern. Previously, IMF also mentioned that Pakistani rupees is about 20% over-valued. Lilly: Drug can prevent COVID-19 illness in nursing homes, India's homegrown vaccine developer warns some to avoid shot, A new COVID-19 challenge: Mutations rise along with cases, The wretched condition of Pakistan’s prisons continues to aggravate. Financial analysts are expecting that the next government would have to seek bail-out from International Monetary Funds (IMF) due to widening gap in current account deficit. The U.S. is the biggest importer of crude oil. State bank of Pakistan referred the recent decline of rupees value as an outcome of demand and supply dynamics of foreign exchange in the bank market. But March 2020 could be hard on the exchange rate and the rupee’s sharp drop to 73.25 per dollar … Filed on June 27, 2019 | Last updated on June 27, 2019 at 07.46 am. macro_adspot: ©2021 Galadari Printing and Publishing LLC. READ MORE, Dubai announces new Covid safety rules: Full list, UAE: Compulsory Covid tests expanded to include teachers, Coronavirus: UAE reports 3,566 Covid-19 cases, 4,051 recoveries, 7 deaths, Covid-19: Belgium to ban non-essential travel, Dubai fights Covid: New gym rules announced, Pakistani man killed during TikTok stunt on train track, Sheikh Mohammed praises Dubai Metro employee for his kindness, Missile or drone intercepted over Riyadh: Saudi TV, UAE's Covid vaccine success will help lift most restrictions, UAE Covid-19 vaccine: 87,720 residents vaccinated in a day, Russia’s Sputnik V vaccine in UAE: All you need to know. It has been the worst performing Asian currency, losing 35 per cent in the last one year and 17.6 per cent year-to-date. With a fresh appreciation of 6 paisas today, the Pakistani Rupee has strengthened by a cumulative Rs. 3) The rupee had gained nearly 6 per cent against the US dollar last year. Pakistan enjoys huge inflows in the shape of remittance for a few months. In the month of June 2018 itself, the rupee has fallen nearly 3%. Also Read: Election 2018: Pakistan s new rupee devaluation shows economic risk before election. "Its impact on Pakistan's highly import driven economy is exorbitant. During FY18 (July-May), current account … The rupee slumped to a fresh record low of 71 against the dollar for the first time ever by falling 26 paise on persistent demand for the US … CurrentRequestUnmodified: /business/markets/bitcoin-extends-slide-heads-for-worst-week-since-march-2020 Salman Shakil Shaikh, a UAE resident, said the rupee's decline is good news for expatriates as they will get higher rates for remittances, but it's not good for the country. All new KT app is available for download: Get the latest news around the world in your inbox, so you dont miss out on the action. While Rupee will keep on falling against dollar to new lows every week (so from 140 to $1 to 200 to $1 and soon Rs 400 to $1), worker salaries and profits will not be increased accordingly by public and private sector companies and hence the salaried class will be earning far less money in $ terms than what they were earning before. The question now arises that in the presence of increasing deficits why did the currency rate remained relatively stable. Click/tap here to subscribe to Khaleej Times news alerts on Telegram. The rupee weakened against the US dollar at Rs160.32 in the inter-bank market on Tuesday compared with Monday’s close of Rs159.98, according to the State Bank of Pakistan (SBP). Why Rupee falling-Reasons At present, the value of India's currency "rupee" is continuously falling and its value has declined by 12% between January - September 2018. The inflationary repercussion on general public is also phenomenal. The major reasons behind Indian Rupee fall are strengthening US Dollar on recovery in the US economy. Etihad Credit Insurance, TDB sign agreement. Open trading on Monday caused the Pakistani rupee to fall in value against the US dollar. SBP sees this step as a remedy to address the current imbalance in the external account which would strengthen the country’s economy. The account and trade deficits which refer to increase in the outflow as compared to the inflow of national currency, are the determiner of economic situation of the country. However, It is likely to find an optimal economic equilibrium soon with government rigorous measures on improving tax collection, productivity and exports expansion," Moti said. Reaching at the historic level of Rupees 128.75 per dollar this week, Pakistani rupee has fallen down to almost 21% relative to the US Dollar, from December 8 to up till now. India is facing a huge decline in Rupee against US dollar, which has put a smile on the faces of exporters as they will get more Rupees per US Dollar, but is a sign of worry for the Indian economy as India is a net importer and is currently facing a trade deficit of $78 billion. Let us now return to the depreciation of the rupee against the dollar during the outgoing fiscal year (FY2018). However, on the other hand some analysts have warned that the Pakistani currency is still over-valued and would continue to fall even after the election. Pakistan’s economy is going through a familiar boom-and-bust cycle; debt is soaring, inflation is rocketing, and reserves are falling after a deficit blowout. macro_profile: , "Air fares are going up due to an increase in fuel surcharge. Global economic slowdown: This the major factor which is … The contemporary national market conditions have especially turned the attention towards understanding the depth of the problem. On Thursday, the rupee had settled at 72.99 against the American currency. Since, the last year State Bank of Pakistan has purposely carried out four rounds of currency devaluation to aid the economy in dealing with lack of foreign reservoirs and growing deficit. The currency depreciation indicates a weakening economic situation of a country. by Staff Report, (Last Updated March 26, 2020) KARACHI: The United States Dollar (USD) closed at Rs166 after Pakistani Rupee (PKR) fell by Rs4.53 against the greenback due to a decrease in the interest rate and the subsequent flight of hot money. Pakistan expatriates in the UAE are … Election 2018: Pakistan s new rupee devaluation shows economic risk before election, GIKI graduates develop Pakistan's first real-time online shopping search engine, Alamgir Welfare Trust - A beacon of hope amidst coronavirus pandemic, EFU Life launches 'Humrahi' season 2 with unique message of future planning, Dollar value increases to Rs128.60 in interbank market, POL prices likely to increase as Pakistan rupee fall against dollar, Bring Shahbaz to justice, demands Tahirul Qadri, Pakistani rupee hits record low at Rs128 against US dollar, PKR vs Dollar: The dilemma of falling rupee. This would pull Pakistan in further debt and discourage potential investment. 163.97 against … its sharply declining value against the … When the crude oil prices go down, the U.S. saves more dollars in buying it. At 1130 IST, the Pakistani rupee was trading at 105.50 to the dollar, 0.4 percent stronger than its previous close, having recouped most of the losses it made in Wednesday’s trade. 3. However, the Chinese Renminbi and Taiwanese Dollar are down over 2 per cent each against the greenback. In the past decade, the rupee has appreciated seven times against the dollar in March. In its manifesto, one issue that BJP had strongly criticised UPA for, was the free fall of Rupee i.e. Another reason why the Pakistani Rupee is getting strong against the dollar is the current account surplus of $792 million during the first quarter of the financial year (July-Sep FY21). In fact, the self-correcting mechanism of demand and supply would balance the prevailing market system. Just before the election, for the consecutive fourth time Pakistan’s central bank has allowed the devaluation of the Pakistani rupees. In the last one month alone, it lost 9 per cent. 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