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|20 June, 2018

Pakistan rupee falls below 33 against dirham; loses over 3% in 10 days

The South Asian currency fell to the lowest level in its 70-year history.

Image used for illustrative purpose. A currency dealers counts Pakistan rupee bills in Karachi May 20, 2008.

Image used for illustrative purpose. A currency dealers counts Pakistan rupee bills in Karachi May 20, 2008.

REUTERS/Athar Hussain

Pakistani rupee continued to weaken and slumped to an all-time low against the UAE dirham on Wednesday as the government didn't intervene, yet again, to arrest the slide of the currency.

The South Asian currency fell to the lowest level in its 70-year history on Wednesday, hitting 33.11 against the Emirati currency. It has lost over three per cent - or one rupee - against dirham in past 10 days only.

As reported by Khaleej Times last week, analysts had predicted further weakness in the rupee due to the balance of payment crisis, shortage of dollar, political instability ahead of elections and falling forex reserves. They had predicted, and rightly so, that the rupee would plunge to 33 before the new government comes into power in the wake of elections taking place in late July.

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However, the State Bank of Pakistan's decision to stay on the sidelines and watch the rupee's persistent slide is a hint towards devaluation. On June 11, it was the third devaluation of the rupee in the last seven months. The currency was earlier devalued by 5 per cent each time in December 2017 and March 2018.

Muffasar Atta Malik, president, Karachi Chamber of Commerce and Industry, urged the government to arrest the slide in the currency as it 122 against the US dollar. He warned that the decline will have a devastating impact on the already beleaguered economy as it brought about economic distress, which lasted for several years.

"It is an orchestrated devaluation move by the government because, under normal circumstances, you don't see such large depreciation. The rupee today went past 32 mark against UAE dirham today and it looks like it will go down further," Sudhesh Giriyan, chief operating officer, Xpress Money, had told this newspaper.

Rajiv Raipancholia, CEO, Orient Exchange, had forecast rupee to hit 38 against dirham by 2020.

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