All new KT app is available for download: Get the latest news around the world in your inbox, so you dont miss out on the action. The Fed Reserve has increased rates almost four times since Donald Trump became President of the country, showing faith in Trump administration, and recently Lira (Turkish currency) losing 28% against the USD (since, US decided to impose tariffs and is also one of … Since December 2017, the rupee has experienced devaluation of over 33 percent against the US dollar and in the last three weeks alone, it has cumulatively dropped Rs2.25 or 1.6 percent. "Its impact on Pakistan's highly import driven economy is exorbitant. In the month of June 2018 itself, the rupee has fallen nearly 3%. The rupee touched a low of 73.09 and a high of 72.96 during the day. Analysts predict the dollar to go further up before settling somewhere around Rs130. Here’s the brief reflection on the Pakistan’s currency devaluation topic to understand the current situation. Salman Shakil Shaikh, a UAE resident, said the rupee's decline is good news for expatriates as they will get higher rates for remittances, but it's not good for the country. The central bank is unable to support the rupee as its reserves are on the decline due to debt payments. This matches the finding of Germany’s reputed Deutsche Bank, stating that the Indian Rupee could touch 70 to the US dollar in a month's time, with some revival expected by the end of the year. The contemporary national market conditions have especially turned the attention towards understanding the depth of the problem. 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India is facing a huge decline in Rupee against US dollar, which has put a smile on the faces of exporters as they will get more Rupees per US Dollar, but is a sign of worry for the Indian economy as India is a net importer and is currently facing a trade deficit of $78 billion. The rupee weakened against the US dollar at Rs160.32 in the inter-bank market on Tuesday compared with Monday’s close of Rs159.98, according to the State Bank of Pakistan (SBP). Global economic slowdown: This the major factor which is … The rupee fell sharply against the US dollar today to register a new low as the greenback continued its rally against other global currencies. With a fresh appreciation of 6 paisas today, the Pakistani Rupee has strengthened by a cumulative Rs. The India rupee is down 1.82 per cent against the US dollar year-to-date. The IMF has long advocated Pakistan to loosen its grip on the rupee, and estimated the real exchange rate was overvalued by as much as 20 per cent in 2017. USD vs PKR – Pakistani Rupee Losing Ground. All rights reserved. The contemporary situation has given rise to the debates of why the rupee has experienced such great fall and are the current situation of our economy really worrisome. Amidst the current currency devaluation fiasco, there are two different types of opinions which came on the scene. In January, the dollar was trading at Rs110.7 against one rupee but since then it has increased 15.6%, reaching an all-time high of Rs128 on Monday due to pressures on the country’s external front. In 2015 the trade and current account deficits were $22.16 billion and $3.12 billion respectively followed by an increase of $23.9 bn to $5.49 bn in 2016 and further it toppled to 32.48 bn and 12.49 bn in 2017. The UAE is Africa’s fourth-largest global investor with an... READ MORE, Abu Dhabi Sustainability Week 2021 consists of a series of high-level ... READ MORE, The acquisition will be another step towards cementing Agthia’s ... READ MORE, Natural gas will play a leading role in national energy strategies... READ MORE, Those who have already received the first dose and are awaiting their ... READ MORE, The employee had helped a Dubai-based journalist as her Metro card... READ MORE, UAE set to be biggest beneficiary of rapid vaccination rollout, say... READ MORE, More than 24.2 million tests have been carried out. The answer to this riddle is that the currency was kept overvalued by pumping the foreign currency in the market. In fact, the self-correcting mechanism of demand and supply would balance the prevailing market system. Also Read: Dollar closes at Rs128.26 Analysts predict the dollar to go further up before settling somewhere around Rs130. But March 2020 could be hard on the exchange rate and the rupee’s sharp drop to 73.25 per dollar … Etihad Credit Insurance, TDB sign agreement. They consider that situation can be devastating for Pakistan’s economy in the long-run. It means that Pakistani currency has fallen by more than Rs21 against one dollar in just over a month. It has been the worst performing Asian currency, losing 35 per cent in the last one year and 17.6 per cent year-to-date. The major reasons behind Indian Rupee fall are strengthening US Dollar on recovery in the US economy. In today’s session, the currency got some relief after the good GDP numbers but failed to sustain and fell to an all time low levels. While Rupee will keep on falling against dollar to new lows every week (so from 140 to $1 to 200 to $1 and soon Rs 400 to $1), worker salaries and profits will not be increased accordingly by public and private sector companies and hence the salaried class will be earning far less money in $ terms than what they were earning before. Copyright © 2021. In its manifesto, one issue that BJP had strongly criticised UPA for, was the free fall of Rupee i.e. The inflationary repercussion on general public is also phenomenal. Meanwhile, more Pakistani expatriates are rushing to banks and money exchange houses in the UAE to remit money back home in the wake of record fall in Pakistan rupee against US dollar. The question now arises that in the presence of increasing deficits why did the currency rate remained relatively stable. During FY18 (July-May), current account … Let us now return to the depreciation of the rupee against the dollar during the outgoing fiscal year (FY2018). The Indian Rupee is not taking halt against US dollar, falling continuously to touch the lifetime low of 71.10 against the greenback. New Delhi: The Indian rupee continued to drop against the US dollar on Thursday with the Indian currency falling to a record low of 69.09 against the greenback.The currency has cracked over 8% in this year so far emerging as the worst performing currency among its Asian peers. Why Rupee falling-Reasons At present, the value of India's currency "rupee" is continuously falling and its value has declined by 12% between January - September 2018. When the crude oil prices go down, the U.S. saves more dollars in buying it. 4) For the whole of 2017, the US dollar index slid more than 9.8 … Economists and Pakistani analyst have been quoted saying that the current situation of national currency would not cause any panic in the market. Pakistan enjoys huge inflows in the shape of remittance for a few months. Why Indian Rupee is Falling Against The US Dollar The Indian rupee experienced one of the most pronounced declines in 2018 where the currency has lost 8% of its value. However, on the other hand some analysts have warned that the Pakistani currency is still over-valued and would continue to fall even after the election. All Rights Reserved. Previously, IMF also mentioned that Pakistani rupees is about 20% over-valued. The rupee which has maintained a level of Rs 70 for the last two years has depreciated to Rs 76.15 levels in just three months. macro_adspot: ©2021 Galadari Printing and Publishing LLC. Devaluation – a recipe to economic stability or economic disaster? macro_profile: , In the middle of currency’s depreciation period, many views are coming forth. 3. Another reason why the Pakistani Rupee is getting strong against the dollar is the current account surplus of $792 million during the first quarter of the financial year (July-Sep FY21). Just before the election, for the consecutive fourth time Pakistan’s central bank has allowed the devaluation of the Pakistani rupees. SBP sees this step as a remedy to address the current imbalance in the external account which would strengthen the country’s economy. Financial analysts are expecting that the next government would have to seek bail-out from International Monetary Funds (IMF) due to widening gap in current account deficit. 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