Pakistani rupee weakens amidst economic crisis at FinGad.com

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Pakistani rupee weakens amidst economic crisis

Categorie: Currencies
Submitted 2 months ago by

Noor-us-sabbah , Senior Editor at FinGad

The Pakistani rupee weakened almost 10 per cent against the US dollar during the past 6 months. The rupee has been under pressure mainly because Pakistan’s oil imports have considerably increased. As international crude oil prices have been continuously going up, the soaring demand for dollars to make import payments has become the main factor impairing the rupee’s value. Pakistan is going through grave economic crisis that requires intelligent, efficient and effective measures. The rupee hit its lowest in the interbank market last month on May 20, 2008. It closed at 69.80 against the US dollar on May 20. State bank of Pakistan quickly intervened but again the rupee fell as low as 69.90 against the dollar in the open market on May 22, 2008. Falling trend in the PKR/USD parity persisted in the first five months of year 2008, until the State Bank of Pakistan took matters in hands. Later the rupee recovered 3% after plunging to its lowest on May 20 in the inter-bank market; but it had already suffered 10% depreciation in its value against the US dollar (approximately 7 Rs per dollar) since January 2008. Besides, the benchmark 100-index at the Karachi Stock Exchange also took a nose dive in the midst of economic crisis and consequently, Pakistani investors started diverting their funds from local stocks to the US dollars. The US dollar had almost vanished from the market. Outward payments were abnormally high, whereas inward receipts became drastically slow. The State Ba... More...

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#1 | Liz @ 2 months ago User Rank : 662 Portfoilo Balance: $216,918.00 Comment Rating: 0 Flag Comment Spam | Miscategorized | Prohibited: Depreciation of 10% is quite a lot. While USD is weakening, some other currencies also follow its step. But one thing i'm sure is, the Malaysian Ringgit is not that badly affected, in fact the value is increased due to the decreasing of the USD value.

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