Dubai: The Pakistani rupee will continue to slide and fall to another record low this year, according to some analysts.
The currency fell to a record 39.48 per UAE dirham and closed at 146.2 against the US dollar on Thursday. The next day (Friday), it slumped further to 40.46 per dirham and 149.50 versus the US dollar.
The declines were recorded after Pakistan and the International Monetary Fund (IMF) agreed on a $6 billion loan to bail out the economy, which is saddled with billions of dollars in debts.
Vijay Valecha, chief market analyst at Century Financial, said on Sunday the rupee’s weakness is expected to continue and over the next four to five months, it will slump by 15 per cent to 20 per cent.
That means remittance senders from UAE could get more than 46 Pakistani rupees per 1 UAE dirham sent. A senior economist also predicted a much more pronounced decline, saying that the rupee could touch 200 per US dollar.
“Given the fact that the IMF bailout of $6 billion might just fill half the gap of the current needs of the country, which is estimated now to be more than $12 billion, the rupee could slide further down till 170 against the US dollar, which would be a rate of 46 plus against the dirham,” Valecha told Gulf News.
“The Pakistani rupee [dropped] more than five per cent last week on the IMF bailout condition woes. The Pakistani rupee has seen a huge downside of more than 28 per cent in the last one year,” Valecha noted.
Economist Dr Kaiser Bengali was also quoted by local media as saying that the Pakistani rupee could touch more than 200 per US dollar. In his recent speech, the expert, who has a number of published research in his name, highlighted Pakistan’s huge trade deficit and how much the Asian currency has fallen in value against the US dollar.
“Till 2003, for every 100-dollar export, we used to have imports worth $125 to $130, a deficit of $25 to $30. Today, the difference is of $125. You can’t cover such a huge gap,” he was quoted by Dawn.com as saying.
Over the last ten months, from July 2018 to April 2019, Pakistani expatriates remitted $17.9 billion to their home country, registering an increase of 8.45 per cent compared with nine months earlier.
Data released by Pakistan’s central bank this month showed that in April alone, Pakistani expatriate workers’ remittances reached $1,778.9 million, up by 2 per cent from March 2019.