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Pak rupee depreciates to Rs119.05

Pak rupee depreciates to Rs119.05

KARACHI: The Pakistani rupee on Friday continued losing value against the US dollar in open market and even crossed Rs119 mark mainly due to shortage of the US currency.

As per the local money market, the greenback gained 50 paisas in open market for buying at 118.50 and for selling at 119.05, while it remained unchanged in interbank for buying at 115.50 and for selling at 115.70.

On Thursday, the dollar closed higher after adding 10 paisas for buying at 118 and for selling at 118.55 in open market. The US currency closed unchanged in interbank for buying at 115.50 and for selling at 115.70.

The State Bank of Pakistan’s stipulation for submission of identification proof before buying and selling of foreign currency more than $500 has caused dollar supply in the kerb market to have decreased by half. The shortage of the US dollar caused the price to shoot up in the kerb market.

According to Forex Association of Pakistan (FAP) President Malik Bostan, exchange companies bought $2-3 million daily from individuals in the kerb market. He added supply to dealers had fallen to less than $1 million on Thursday.

The government let the rupee depreciate by around 9.5% in two rounds – 5% in December 2017 and 4.5% in March 2018 – in a bid to shore up reserves by encouraging exports and discouraging imports.

The move has helped a little bit in improving exports, but has failed to curb excessive imports and added to the country’s external debt.