Rupee dips slightly but largely stable

Rupee remains largely stable at Rs279.33 against US dollar in the inter-bank market

KARACHI:

Although Pakistani currency dipped slightly, it remained largely stable at Rs279.33 against the US dollar in the inter-bank market on Monday as heightened political turmoil in the country following general elections did not leave a large impact on the currency.

According to SBP data, the rupee ticked down 0.02%, or Rs0.03, against the greenback on a day-on-day basis, ending its three-day winning streak. The currency market came under moderate pressure, though the central bank reported improvement in workers’ remittances to $2.4 billion for January 2024. It indicated that the supply of foreign currency remained better in the inter-bank network.

Read Rupee ticks up to 3-1/2-month high

The latest decrease in the SBP’s foreign exchange reserves, however, forced importers to pay a higher price for purchasing the US dollar. The bank reported on Friday evening that the reserves dropped $173 million to $8.04 billion on foreign debt repayments in the week ended on February 2. The currency has cumulatively gained 9.96%, or Rs27.82, in the past five months, reaching a three-and-a-half-month high at Rs279.28.

Exchange Companies Association of Pakistan reported that the currency dropped 0.06%, or Rs0.18, and closed at Rs281.19/$ in the open market. Treasury firm Tresmark projected on Saturday that the rupee would remain stable and may improve to Rs272/$ in the first two weeks post-general elections held on Thursday last week. The emergence of heightened political instability in the aftermath of alleged tampering with election results is likely to prevent the rupee from notching up further gains. Any hung parliament may deal a blow to the economic achievements made over the past few months under the caretaker administration.

Published in The Express Tribune, February 13^th, 2024.

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