KARACHI, Pakistan: The Pakistani rupee further depreciated by 3.06 percent against the US dollar on Tuesday, closing at Rs 222 in the interbank market.
— SBP (@StateBank_Pak) July 19, 2022
Earlier on Monday also, the dollar closed at Rs 215.20, appreciating 1.97 percent.
In a statement, the State Bank of Pakistan (SBP) said that the recent movement in the rupee is a feature of a market-determined exchange rate system.
Under this system, the current account position, relevant news items, and domestic uncertainty together determine daily currency fluctuations.
The State Bank said that the recent rupee depreciation against the US dollar is also in large part a global phenomenon.
Globally, the US dollar has surged by 12 percent in the last six months to a 20-year high, as the Fed has aggressively raised interest rates in response to rising inflation.
The SBP said that like most advanced and emerging market currencies across the world, the Pakistani rupee has depreciated against the US dollar since December 21. It has depreciated by 18 percent over this period.
In real effective terms—i.e. against a basket of currencies in which Pakistan trades & adjusting for inflation—depreciation in the rupee since December 21 has only been 3 percent. This is a better measure of the strength & competitiveness of a currency than the US dollar rate.