Pakistan rupee hits new low against Omani rial, Indian rupee stable
December 5, 2018 | 9:35 PM
by Madiha Asif
The value of the PKR fell sharply last Friday, reaching PKR373 from PKR348 but gained strength in the last few days.

Muscat: While the Pakistani rupee (PKR) plunged to an all-time low against the Omani rial, trading between PKR358 and PKR359, the Indian rupee (INR) remained stable at Rs.183.

However, Global Exchange CEO Madhusudhan believed that Indian rupee would trade between INR180 to INR185 in the coming days. “There will not be much difference if the policies remain unchanged,” Madhusudhan said.

On the other hand, the value of the PKR fell sharply last Friday, reaching PKR373 from PKR348 but gained strength in the last few days.

“Pakistan is facing a liquidity crunch and looking for a bailout package to handle the balance of payments situation. The foreign exchange reserves have declined to a four-and-a-half year low and the current account deficit continues to widen; this is a threat to the balance of payments crisis,” said Boban M.P., CEO, Oman UAE Exchange.

He added that State Bank of Pakistan (SBP) raised the key interest rate on November 30 to ease the widening Current Account Pressure and also started negotiations with the International Monetary Fund (IMF) to secure a loan.

“PKR fell sharply, sensing the government’s talks with the IMF to secure a loan. It seems to be a continuation of the IMF’s condition for a bailout package. The PKR fell by almost 25, dropping from PKR348 to PKR373 on Friday and settling at PKR351, after the State Bank of Pakistan intervened. The level of PKR373 was an all-time low,” he added.

“The black market of dollars was also a reason for this massive devaluation. Considering the demand for dollars, PKR may continue to be under pressure going forward. It has now been trading between PKR358 and PKR359 as of today,” Boban said.

The value of Indian rupee against the US dollar was $70.68 earlier in the day and climbed up to $70.47 later, Madhusudhan said, adding that “the immediate movements of the Indian rupee depend on the decision of the OPEC meeting scheduled, which has got a direct bearing on the oil price and the rupee.”

In terms of remittances, according to Boban, the devaluation in the PKR will attract more expatriates living in the country to remit more money back home.

“This devaluation brought about a very attractive rate for expatriates to remit money to Pakistan. We have witnessed a good increase in business in the Pakistan corridor during the last couple of days as the rate has become very attractive – the all-time best rate for remitters.”

Talking exclusively to Times of Oman, A.H. Raja, former chairman of Pakistan Social Club Oman said that depreciation of currency is usually done to boost the export in order to have balance of trade.

“In the recent past, many countries in the Asian region have depreciated their currency and Pakistan is no exception to it. However, government officials in Pakistan are hoping that the effect of this current depreciation of PKR will soon be recovered through several measures being taken in the near future,” Raja added.

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