Pakistani currency maintained its downward trend for the second consecutive working day on Monday, falling by a fresh 0.68%, or Rs1.90, to a two-week low at Rs279.80 against the US dollar in the inter-bank market.
The latest and comparatively larger drop came after workers’ remittances slumped 14% to $27 billion in the previous fiscal year ended June 30, 2023.
Besides, market speculation suggests the illegal Hawala and Hundi market has once again reorganised after the gap of a couple of weeks. The local currency depreciated up to Rs305/$ in the black market, forcing traders to pay a higher price for dollars in the inter-bank market as well.
Market talk also indicated that the government had started gradually reopening all imports under the new IMF programme conditions. Accordingly, the rupee came under pressure following the spike in demand for dollars.
In the open market, the rupee fell by Rs1 to Rs283/$ on Monday, according to the Exchange Companies Association of Pakistan (ECAP). Resultantly, the gap between exchange rates in the two currency markets remained narrow at Rs3.
ECAP President Malik Bostan pointed out that import pressure took the currency down to Rs280/$.
“This is an alarming situation, but not that alarming which should worry the nation,” he said, adding that currencies fluctuated on the demand and supply situation. “This should be taken as a normal phenomenon.”
Published in The Express Tribune, July 11th, 2023.
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