Pakistani currency hit a one-month low at Rs278.47 against the US dollar in the inter-bank market on Wednesday, extending its losing streak for the third consecutive day in the wake of higher demand for the greenback.
According to the State Bank of Pakistan (SBP)’s data, the rupee ticked down Rs0.08 compared to Tuesday’s close of Rs278.39 against the dollar.
The currency has cumulatively dropped 0.52%, or Rs1.44, in the past two months compared to the five-and-a-half-month high close at Rs277.03/$ in the last week of March 2024.
The gradual rupee devaluation came on the back of apparent uptick in demand for the US dollar since Pakistan initiated talks with the IMF in mid-April for a new loan programme.
The global lender has assumed that the Pakistani currency will drop to Rs329/$ in the next 13 months till June 30, 2025. The Exchange Companies Association of Pakistan reported that the rupee decreased Rs0.11 on a day-on-day basis and closed at Rs279.54/$ in the open market.
Demand for the greenback has picked up in recent days amid a widening of the trade deficit by 22% year-on-year in April. On the other hand, the foreign exchange reserves, held by the SBP, have continued to improve, rising past $9 billion.
Published in The Express Tribune, May 23rd, 2024.
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