The Pakistani rupee continued to decline as it lost 9.4% of its value in 2021. The Year 2021 is the fourth-worst year for the rupee since 2001. The rupee started in 2001 at a value of 57.95/US$.
The Pakistani rupee has depreciated against the US dollar in past 11 years since 2008. 2018 is considered as the most adverse year for the rupee (down 20.1%), followed by 2019 in second place (down 10.3%).
Starting at 159.8 against the US dollar on January 1,2021 Rupee closed at 176.51 at 31-December-2021 against US$.
As Pakistan’s economy began to stabilize, External Trade indicators began to weaken. The huge trade deficit continue to widen and increased pressure on the rupee.
The State Bank of Pakistan (SBP) has stressed that the exchange rate is now reflecting market dynamics – supply and demand for the currency, saying that the rupee has lost value due to demand for the dollar.
The current account deficit continued to widen during the current fiscal year as commodity prices, especially oil, rose, exacerbating the problems.
SBP continue to take various measures to ward off unnecessary pressures from the FX Market. This included measures to prevent speculative buying and selling of foreign exchange. Earlier, SBP had set a cap of $ 100,000 (or the equivalent in another foreign currency) per person per calendar year when buying foreign currency from foreign exchange companies. It also imposed restrictions on travelers to Afghanistan who are allowed to carry only USD 1,000 per person per visit and no more than USD 6,000 per year
SBP also took action to curb the growth of import invoices as it now it requires 100% cash margin (CMR) to import 525 products.
The SBP also instructed commercial banks to circulate a five-day schedule of future import charges and revise it from the previous two-day instruction. He also urged banks to apply for import licenses worth $ 500,000 per transaction, while lowering the initial redemption ceiling by half a million dollars.
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