Rupee hits new low near 300 vs dollar

Extending overnight losses for almost the same reasons, the rupee hit an all-time low of Rs298.93 against the US dollar in the interbank market on Thursday. In the open market, the local currency lost Rs2 to settle at 299. Meanwhile, the foreign exchange reserves of the State Bank of Pakistan (SBP) declined by $74m to $4.38bn for the week ending on May 5, the central bank reported on Thursday. The total reserves of the country were down by $53m to $9.99bn. Commercial banks’ reserves, however, recorded a paltry rise of $21m to $5.6bn during the week. There was a consensus in the financial market that the steep devaluation of the rupee against the dollar was not solely the direct outcome of the deteriorating political situation. Instead, it was widely believed that large payments from Pakistan allowed the dollar to gain strength. The State Bank of Pakistan (SBP) reported that the dollar rose by Rs8.71 or 2.91pc on Thursday from overnight closing of Rs290.22. In the last two sessions, the greenback appreciated by Rs14.08. However, currency dealers said the dollar depreciated to Rs292 when it was sold in tom value (tomorrow value). Atif Ahmed, a currency dealer in the interbank market, said: “The market is expected to open at Rs292 or slightly above on Friday as the tom value of the dollar remained around Rs292.”