Rupee slips amid dollar supply downturn

KARACHI:

The Pakistani currency dipped by Rs0.03, closing at Rs278.36 against the US dollar in the inter-bank market due to a decrease in the supply of foreign currency in the domestic economy.

Overall, the currency remained stable, fluctuating in the range of Rs278-278.50/$ for several weeks.

The recent nominal depreciation occurred after Tresmark, the treasury firm, reported that exporters had slowed down selling US dollars on the futures counter following the IMF’s projection that the domestic currency would depreciate by 16% to Rs329/$ starting July 1, 2024. Pakistan’s government disagreed with the IMF projection, suggesting that the local currency may drop to a maximum of Rs295/$ in FY25.

The Exchange Companies Association of Pakistan reported that the domestic currency depreciated by Rs0.08 on a day-to-day basis, closing at Rs279.54/$ in the open market. The reduction is accompanied by a slight drop in the country’s forex reserves, supporting speculation that the supply of foreign currency is slowing down.

Published in The Express Tribune, June 4^th, 2024.

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