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Fitch Sees US dollar will attain Rs180 in 2022

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Fitch Sees US dollar will attain Rs180 in 2022

According to Fitch, the average rupee rate this year is 164 against the US dollar, up from 158 previously. Fitch has forecast an average rate of 180 for 2022, up from the previous 165.

Fitch saw that the US dollar would reach 180 rupees in 2022.
“We expect the currency to fall further as Pakistan’s trade conditions deteriorate, US monetary policy tightens and US dollars flow in and out of Pakistan and into Afghanistan,” it said.

The Pakistani rupee has been depreciating since May. It was at 170.50 against the dollar on Thursday, 10 percent weaker than its May peak of 150.95.

Analysts say the rupee has been affected by continued demand for the dollar due to the country’s current account deficit, while pressure on the Afghan situation is mounting.

Pakistan’s stock exchange also fell nearly 3 percent this week amid fears that a bill was introduced in the US Senate seeking to impose sanctions on the Taliban that could potentially spread to Pakistan.

In the long run, Fitch said, the rupee will weaken against the dollar, with tighter US monetary policy tightening and higher structural inflation against the United States.

However, he said the real effective exchange rate of the Pakistani rupee would limit excessive weakness in the currency.

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