Rupee ticks down over tough challenges ahead

KARACHI:

Pakistani currency on Monday ticked down Rs0.08 and closed at Rs278.20 against the US dollar in the inter-bank market as the International Monetary Fund published a detailed review report on Pakistan’s economy, indicating tough challenges ahead on the economic and political fronts.

According to the State Bank of Pakistan’s data, the rupee had closed at Rs278.12/$ on Friday.

The local currency has been hovering around current levels for the past couple of weeks, which signals that the rupee-dollar parity has largely stability in recent times.

The rupee has cumulatively gained 10.39%, or Rs28.90, in the past eight months since reaching the record low close at Rs307.10/$ in the first week of September 2023.

Exchange Companies Association of Pakistan reported that the rupee lost a notable Rs0.35 on a day-on-day basis to close at Rs279.55/$ in the open market.

The downward trend in the two currency markets suggests that the demand for US dollars has surpassed their supply with exporters slowing sales of their dollar proceeds on the futures counter, according to market players. The currency also came under pressure in the backdrop of an IMF report that pointed to political uncertainty and questioned how Pakistan’s government would implement the next loan programme as fulfillment of some previous promises had already been delayed.

Research houses and currency dealers, however, insisted that the rupee would largely remain stable till the end of the current fiscal year on June 30, 2024.

Published in The Express Tribune, May 14^th, 2024.

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