1 dollar to 1 pakistani rupee1/4/2024 ![]() We believe the decline will stem from here as the rupee has adjusted to its fundamental. "With the recent depreciation, the Pak rupee is back to last August’s REER level at 97 approximately. So far, there are no traces of manipulation and the decline is purely a demand and supply phenomenon," Aslam told Khaleej Times. "The SBP let the rupee fall, as it believes it is overvalued in real terms despite higher inflation. He said the central bank has been following a flexible exchange rate policy and focusing on sustainable current account balance therefore, it interferes only when any manipulation is witnessed. Muzammil Aslam, chief executive of Tangent Capital Advisors, said the Pakistani rupee has been witnessing pressure in the post-budget period on account of rising imports led partly by higher commodity prices and for machinery. "Once the pressure for import payments releases and the current account deficit narrows, the rupee performance will improve again," he added. The situation reverses when REER is above 100 on the index. REER below 100 means the country’s exports remain competitive and imports expensive. Current account deficit is expected to reduce with improvement in supply chain globally," he said. "I think the performance of the Pakistani currency will improve as real effective exchange rate (REER) is below 100 again. "The rupee has lost value as current account deficit for June 2021 at $1.6 billion was higher than expectations," Tariq told Khaleej Times. Samiullah Tariq, head, R&D, Pakistan Kuwait Investment Company, said the rupee will recover some ground during the fourth quarter and is likely to stabilise at Rs165 to a dollar by year-end. "The current account deficit widened to $1.6 billion in June compared to $650 million in May," according to the State Bank of Pakistan, the central bank. Market experts and analysts said the rupee will remain under pressure against the US dollar, the UAE dirham and other major currencies chiefly due to current account deficit which stood at $1.85 billion in fiscal year 2020-21 owing to a jump in imports on account of increase in crude oil and other commidity prices. The rupee lost 54 paisas against the greenback and closed at Rs162.43 to the dollar on Friday as compared to Rs161.88 a day earlier, according to the financial analytics platform Capital Stake.
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