Rupee dips to one-week low

Gradually rising dollar demand dents rupee value

KARACHI:

The gradual rise in demand for the US dollar continued to take its toll on Pakistani rupee for the third successive day on Wednesday, as the domestic currency dropped to a one-week low near Rs280/$ in inter-bank market.

According to State Bank of Pakistan’s (SBP) data, the rupee dipped 0.16%, or Rs0.45, and closed at Rs279.88 against the greenback. In the past three days, the currency has cumulatively depreciated 0.38%, or Rs1.07.

Market talk indicates that the currency has come under pressure ahead of the arrival of an International Monetary Fund (IMF) team in Islamabad next week. It will undertake first review under the $3 billion standby arrangement.

Earlier, the rupee staged its longest rally in three years with gains of around 11%, or more than Rs30, over 28 consecutive working days, and hit a three-month high at Rs276.83/$ about one week ago. It came after touching the record low at Rs307.10/$ in the first week of September 2023.

The currency rebounded following a widespread crackdown on foreign currency smugglers and hoarders to eliminate black markets and dismantle the illegal Hawala-Hundi network. Experts said the currency may depreciate to Rs290-300/$ by the end of December 2023 amid renewed demand for the dollar in gradually expanding economic activities.

In open market, the currency fell 0.17%, or Rs0.50, to Rs282 against the greenback, according to the Exchange Companies Association of Pakistan (ECAP).

The difference between exchange rates in the two markets widened to 0.75%, or Rs2.12.

Gold slides

The local gold pricing body revised down bullion’s price by Rs750 to Rs208,450 per tola (11.66 grams), signalling that demand for the precious metal had declined in recent days.

 

Published in The Express Tribune, October 26^th, 2023.

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