The Pakistani rupee has hit a new all-time low as some analysts see the regime change in Afghanistan weighing on the rupee as well, apart from domestic factors, The News reported.
“The extra pressure on the rupee is due to the Afghanistan factor. The rupee remained under stress ever since the Taliban took control of Afghanistan following the withdrawal of US forces from the country,” said Khurram Schehzad, the CEO of Alpha Beta Core.
There is an outflow of dollars to Afghanistan because of the scarcity of the US currency amid dried foreign aid after the Taliban set up a government in the war-torn nation, The News reported.
The Pakistani rupee skidded to an all-time low on Tuesday as importers scrambled to buy dollars, with the currency looking increasingly vulnerable to a swelling current account deficit.
A rising food import bill and slowing export growth have heightened the risk on the rupee and the outlook remains bearish, the report said.
Analysts said the sharp increase in imports is driven by higher international commodity prices, especially oil, and robust domestic demand.
“Imports crossed the $6 billion-mark for the second time in last three months and remained above the $5 billion-mark for the last six months, due to uptick in economic activity amid higher commodity prices which put pressure on rupee as the SBP (State Bank of Pakistan) is using it as the first line of defence,” said analyst Muhammad Awais Ashraf from the Foundation Securities, the report said.
Pakistan’s trade deficit soared 133 per cent year-on-year to $4.05 billion in August alone. It jumped 114 per cent to $7.32 billion in the first two months of the current fiscal.
Imports rose 89.9 per cent to $6.31 billion in August, while exports increased 42.5 per cent to $2.25 billion in the same month.