News Today: Rupee Hits All-Time Low Value Against US Dollar
Yesterday marked an extremely saddening day in economical history of Pakistan. Pakistani Rupee hits all-time low value against US dollar. A single dollar now costs Rs. 168.18 in the inter-bank market after an increment of Rs. 0.52. The previous all-time low was recorded just a few months back on April 07, 2020 with a value of Rs. 167.89 on the closing market. Yaqoob Abubakar, a representative from Tresmark stated that the Pakistani rupee was under immense pressure recently due to high demand from importers, corporate buyers as well as a substantial repayment of foreign debts. Pakistan’s economy has been suffering to a critical extent because of the pandemic and government’s policies which have yet to prove their efficacy.
The value of Pakistani rupee (PKR) against the US dollar (USD) has touched another historical low, reaching to Rs. 168.18 in the inter-bank market after an increase of Rs. 0.52 on Monday.
The previous all-time low had been recorded on April 7, 2020 at 167.89 on a closing basis.
— The Astrolad (@theastrolad) June 30, 2020
Factors Leading To Downfall Of Currency
Experts have suggested some theories for what factors might have contributed to demotion of national currency’s value. A.A.H Soomro presented an interesting theory. He was of the view that the conclusion of the fiscal year of 2019-20 resulted in an exponential increase in demand by foreign companies and trademarks. Also, the global trend of easing out lock-down has ended up with consumer demanding more supplies than ever before. In Pakistan especially, ease in lockdown has resulted in a worth noticing increment in imported consumer grade products. This has caused decrease in exports to import ratio and has consequently hit the economy hard.
According to Daily Forex, a currency exchange broker, The USD to PKR ratio continues to deteriorate and present before us a weaker foundation of worth of the Pakistani Rupee. The USD to PKR exchange is clearly a quite speculative trade, but under the present market circumstances which show the USD/PKR is actually being bought and what seems to be weaker risk appetite internationally, staying for long and stubbornly remaining a buyer of the US Dollar against the Pakistani Rupee seems like a logical speculative trader intellect.
Unless a currency trader has deep and intimate knowledge of Pakistan’s economy, Pakistan’s government and its corporations’ commercial activities along with failing policies and financial irregularities, taking a position at the USD to PKR exchange is mainly done by the help of technical charts and an understanding of the global market sentiment and feel. However, the stronger support for the USD/PKR which have been developed in the past few trading sessions could actually prove to be quite enticing and worthwhile for speculators. Do not just buy dollars just yet if you do not understand the volatile system.
What are your thoughts on this? Let us know in the comments.