The coronavirus pandemic has brought the global economy to an astonishing halt. However, the value of the United States (US) dollar against the rupee rose Rs4.90 to Rs166 in the interbank market on Thursday.
The US dollar traded in the interbank market at around 166.50 rupees. The dollar gained Rs6.50 in the past three days.
The rise in the dollar came only a day after the State Bank of Pakistan (SBP) slashed its key rate by another 150 basis points. It happened in the wake of rising coronavirus cases and business disruptions caused in Pakistan.
On Wednesday, the rupee had fallen 1.63% or Rs2.60 versus the dollar to close at Rs161.60. The central bank had decreased the interest rate due to coronavirus outbreak in the country that caused losses to the business community. A decline in interest rate will help businessmen to get loans at a minimum interest rate.
Economic loss due to Coronavirus outbreak
The COVID-19 curve in Pakistan is steepening with every passing day. The country is under a partial lockdown. Businesses are operating at less than half of their normal capacities. Shortage of raw materials, shortage of labor or restrictions on the movement of the citizens imposed by the provincial governments is taking a toll on aggregate demand and supply.
Moreover, almost 60% of Pakistan’s exports are linked to the textile industry. The problem this sector currently facing is that a majority of the raw materials required to produce textiles are imported from China. The industry contributes highly to the foreign-currency reserves of this dollar-strapped country.
Earlier, in the wake of the Coronavirus outbreak, Pakistan’s initial economic losses in different sectors of the country’s economy were estimated at Rs1.3 trillion. These losses are occurring on account of a drop in the GDP growth because of a reduction in the services sector, including airline business and others. FBR’s revenue loss, the massive decline in imports, exports, reduction in remittances, disruption in food supplies and other fronts are also other factors for economic loss.
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