Rupee hits 6-week low at Rs287.92/$

KARACHI:

 The Pakistani currency faced a downward trend, depreciating by 0.39%, or Rs1.11, to reach an almost six-week low at Rs287.92 against the US dollar in the interbank market.

This decline continued on Monday for the seventh consecutive working day, primarily driven by an increase in demand for the foreign currency. In the open market, the rupee experienced a 0.68% loss, dropping by Rs2 to Rs293 against the US dollar, as reported by the Exchange Companies Association of Pakistan (ECAP).

Consequently, the gap in exchange rates between the interbank and open markets widened to Rs5, exceeding the International Monetary Fund’s (IMF) directive to maintain it at a maximum of 1.25% for five consecutive working days.

Over the past seven working days, the rupee has cumulatively depreciated by around 4%, or Rs11.46, based on data from the State Bank of Pakistan (SBP).

The continuous depreciation of the rupee has significantly contributed to rising inflation, with the reading reaching a six-decade high of 38% in May, and the fullyear average for FY23 at 29%.

Market sources indicate that the shortage of foreign currency supply compared to demand has added pressure on the rupee