Rupee touches one-week low vs dollar

Currency likely to move in narrow band in current week

KARACHI:

Pakistani currency ticked down for the third consecutive working day on Monday, hitting a one-week low above Rs285 against the US dollar in the inter-bank market as demand for the greenback beat its supply.

According to State Bank of Pakistan’s (SBP) data, the rupee inched down 0.09%, or Rs0.25, and closed at Rs285.64 against the greenback. The currency has cumulatively trimmed 0.18% of its value, or Rs0.51, in the past three working days.

The Exchange Companies Association of Pakistan reported that the rupee dropped 0.17%, or Rs0.50, and settled at Rs287/$ in the open market.

Treasury firm Tresmark said in its weekly commentary over the weekend that the rupee-dollar parity would fluctuate in a narrow band in the current week, though demand for the greenback surpassed its supply.

Read: Rupee halts winning streak on dollar demand

Pakistan’s thin foreign exchange reserves, held by the SBP, are the major driving force behind the drop in the currency exchange rate. The reserves decreased $232 million over two weeks to $7.2 billion, a level that provides cover for less than two months of imports.

The treasury firm believes the central bank is buying US dollars from the market to shore up its reserves, generating an additional demand for the US currency.

Besides, exporters have held back sales of dollar proceeds on expectation the rupee will depreciate further against the greenback. The delay in sales may earn them more profit in rupee terms.

Published in The Express Tribune, November 28^th, 2023.

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