The Pakistani rupee sank to an all-time low on Tuesday morning, crossing 46 against the UAE dirham.
Bloomberg data showed that the rupee hit 168.91 against the US dollar (46.02 versus dirham) despite receiving $1.75 billion in fresh loans from foreign financial institutions last week as well as $1.3 billion loan from the Chinese government on Tuesday. This brings the total official inflows to around $3 billion since June 23, 2020.
But the South Asian currency recovered later in the morning and was trading at 167.77 against dollar (45.71 versus dirham).
The rupee fell on Monday too after an attack on the Pakistan Stock Exchange. It was just shy off its all-time low. The rupee’s previous all-time low of 45.82 was hit on March 29, 2020.
Analysts said the low supply of dollars in the local market and high payment of loans by the government is keeping the rupee under pressure against the greenback. Moreover, dollar demand is also growing as companies are trying to close their financial books at the closure of financial year. They expect the rupee to regain some ground in early July once the fiscal year ends on June 30.
Samiullah Tariq, head of Research & Development at Pakistan Kuwait Investment Company, on Monday said the rupee can reach 46.32 against dirham (170 versus dollar) by December 2020.
In addition, the foreign remittances flow from overseas Pakistanis is also on the decline which is putting pressure on the South Asian country’s currency. Thousands of Pakistani workers have been laid off in the UAE and other Gulf countries since the outbreak of coronavirus.
