1. 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. 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. Pakistan enjoys huge inflows in the shape of remittance for a few months. The major reasons behind Indian Rupee fall are strengthening US Dollar on recovery in the US economy. The rupee has been consistently falling due to widening trade deficit, dwindling foreign exchange reserves and free-float exchange rate mechanism agreed with the International Monetary Fund (IMF) to determine market value of the currency. Previously, IMF also mentioned that Pakistani rupees is about 20% over-valued. 3. Amidst the current currency devaluation fiasco, there are two different types of opinions which came on the scene. Also Read: Election 2018: Pakistan s new rupee devaluation shows economic risk before election. SBP sees this step as a remedy to address the current imbalance in the external account which would strengthen the country’s economy. All Rights Reserved. Click/tap here to subscribe to Khaleej Times news alerts on Telegram. The Pakistani currency dropped by another 7.2 rupees to 164 against the greenback (44.68 against the UAE dirham) in the interbank trading on Wednesday. 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. The contemporary national market conditions have especially turned the attention towards understanding the depth of the problem. Pakistan has been running on trade current account deficit for past years. 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). (WebDesk) - The Pakistani rupee has experienced a worst fall ever against US dollar. Since, the last year State Bank of Pakistan has purposely carried out four rounds of currency devaluation to aid the economy in dealing with lack of foreign reservoirs and growing deficit. 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However, It is likely to find an optimal economic equilibrium soon with government rigorous measures on improving tax collection, productivity and exports expansion," Moti said. In the last one month alone, it lost 9 per cent. USD vs PKR – Pakistani Rupee Losing Ground. However, the Chinese Renminbi and Taiwanese Dollar are down over 2 per cent each against the greenback. 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. Etihad Credit Insurance, TDB sign agreement. Muhammad Aslam Khan, a Sharjah resident, said Pakistanis remittances are increasing due to decline in rupee's value, but at the same time, inflation back home is increasing to alarming levels. The rupee has been consistently falling due to widening trade deficit and an agreement reached with the IMF. Open trading on Monday caused the Pakistani rupee to fall in value against the US dollar. The episodic jolts in the rate of dollar in Pakistan, signaled towards alarming economic conditions of the country. In last week, the foreign exchange reserves of Pakistan increased by $268 million. At 1130 IST, the Pakistani rupee was trading at 105.50 to the dollar, 0.4 percent stronger than its previous close, having recouped most of the losses it made in Wednesday’s trade. 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. In its manifesto, one issue that BJP had strongly criticised UPA for, was the free fall of Rupee i.e. 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. by Staff Report, (Last Updated March 26, 2020) KARACHI: The United States Dollar (USD) closed at Rs166 after Pakistani Rupee (PKR) fell by Rs4.53 against the greenback due to a decrease in the interest rate and the subsequent flight of hot money. State bank of Pakistan referred the recent decline of rupees value as an outcome of demand and supply dynamics of foreign exchange in the bank market. The India rupee is down 1.82 per cent against the US dollar year-to-date. Also Read: Dollar closes at Rs128.26 Analysts predict the dollar to go further up before settling somewhere around Rs130. CurrentRequestUnmodified: /business/markets/bitcoin-extends-slide-heads-for-worst-week-since-march-2020 In the last four business days, the dollar has risen by Rs9.60 against the Pakistani rupee. The continued borrowing would also trigger further imbalance turning the Pakistani economy fragile. The Pakistani rupee continued its slide on Wednesday, hitting another life-time low against the US dollar and the UAE dirham. Dollar supported by strong US data, higher Treasury yields More USD–INR swaps can prevent liquidity crisis from worsening KARACHI: The Pakistani rupee continued to fall to record lows on Friday, after the government agreed in principle to a $6 billion loan from the International Monetary Fund that's expected to set tough conditions on Prime Minister Imran … 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). The currency depreciation indicates a weakening economic situation of a country. The domestic unit finally ended 2 paise higher at 72.97 against the US dollar, marking its fourth straight session of gains. A National Communications Services Company. 4.08 in the last few months (June 30th to October 7) to Rs. Here’s the brief reflection on the Pakistan’s currency devaluation topic to understand the current situation. The U.S. is the biggest importer of crude oil. Bilal Moti, managing partner, Windmills Group, said the rupee's massive depreciation against the dollar is a representation of country's reserves, balance of payment, debt position and GDP levels. "Its impact on Pakistan's highly import driven economy is exorbitant. We take a look at reasons why Indian rupee has been falling against the US dollar. USD-PKR rate may even go higher in the short term. Just before the election, for the consecutive fourth time Pakistan’s central bank has allowed the devaluation of the Pakistani rupees. 3) The rupee had gained nearly 6 per cent against the US dollar last year. Devaluation – a recipe to economic stability or economic disaster? macro_profile: , its sharply declining value against the … The central bank is unable to support the rupee as its reserves are on the decline due to debt payments. Agthia Group acquires majority stake in Nabil... UAE takes strides in the switch to natural gas. The inflationary repercussion on general public is also phenomenal. This strengthens the dollar and that leads to another reason why the rupee is falling against the dollar. Tags: rupee falling dollar raising rupee falling against dollar why rupee valus is falling Canadian study says oral medicine effective in treating Covid-19, Some COVID-19 mutations may dampen vaccine effectiveness. "Air fares are going up due to an increase in fuel surcharge. The rupee touched a low of 73.09 and a high of 72.96 during the day. VACATIONS The falling rupee is bad news for itinerant Indians and vacationers to a foreign country. With a fresh appreciation of 6 paisas today, the Pakistani Rupee has strengthened by a cumulative Rs. The question now arises that in the presence of increasing deficits why did the currency rate remained relatively stable. This would pull Pakistan in further debt and discourage potential investment. The rupee slumped to a fresh record low of 71 against the dollar for the first time ever by falling 26 paise on persistent demand for the US … 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. 4) For the whole of 2017, the US dollar index slid more than 9.8 … But March 2020 could be hard on the exchange rate and the rupee’s sharp drop to 73.25 per dollar … 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. It was only limited to a particular time after which SBP was unable to keep up with the over-valued rate of exchange. Lilly: Drug can prevent COVID-19 illness in nursing homes, India's homegrown vaccine developer warns some to avoid shot, A new COVID-19 challenge: Mutations rise along with cases, The wretched condition of Pakistan’s prisons continues to aggravate. 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. Can COVID-19 vaccines be mixed and matched? 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. In the month of June 2018 itself, the rupee has fallen nearly 3%. The account and trade deficits which refer to increase in the outflow as compared to the inflow of national currency, are the determiner of economic situation of the country. 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. 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. 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 answer to this riddle is that the currency was kept overvalued by pumping the foreign currency in the market. Reaching at the historic level of Rupees 128.75 per dollar this week, Pakistani rupee has fallen down to almost 21% relative to the US Dollar, from December 8 to up till now. The rupee fell to 75.31 against the dollar … During FY18 (July-May), current account … 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. In the past decade, the rupee has appreciated seven times against the dollar in March. Analysts predict the dollar to go further up before settling somewhere around Rs130. READ MORE, Dubai announces new Covid safety rules: Full list, UAE: Compulsory Covid tests expanded to include teachers, Coronavirus: UAE reports 3,566 Covid-19 cases, 4,051 recoveries, 7 deaths, Covid-19: Belgium to ban non-essential travel, Dubai fights Covid: New gym rules announced, Pakistani man killed during TikTok stunt on train track, Sheikh Mohammed praises Dubai Metro employee for his kindness, Missile or drone intercepted over Riyadh: Saudi TV, UAE's Covid vaccine success will help lift most restrictions, UAE Covid-19 vaccine: 87,720 residents vaccinated in a day, Russia’s Sputnik V vaccine in UAE: All you need to know. In fact, the self-correcting mechanism of demand and supply would balance the prevailing market system. 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. Let us now return to the depreciation of the rupee against the dollar during the outgoing fiscal year (FY2018). macro_action: article, 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... 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