Pakistan’s central bank lost its clutch on the US dollar as it appreciated to Rs165—its highest ever.
The Pakistani rupee has, just since last Wednesday, depreciated 4.1% against the dollar. It traded in the interbank market at 158.5 then.
Forex Association of Pakistan President Malik Bostan said that this had happened due to the exponential pull-out from our Special Convertible Rupee Account, coupled with another policy rate cut that brought the benchmark interest rate to 11%.
This was also true in the case of the equity market as in March alone it bled $72 million in sell-offs from international investors.
The usury market on the other hand, lost $1.54 billion in a cumulative outflow of Treasury bills and Pakistan Investment Bonds in the same period. “Investors fled volatile markets across the globe. They will come back after a while once the corona crisis has dissipated,” he said.
He was of the view that the rupee could further sink against the dollar for a short term period.
The US has become the third in line to have been seriously hit by the coronavirus as its cases have surged to 60,000, according to the Wall Street Journal. Its currency has somehow managed to still ace the race against global markets.
All major currencies that were pegged against the dollar have fallen. Hardest hit was the British pound. This also the reason for devaluing the rupee in addition to the outflow of hot money.