Rupee faces mild pressure after long holidays

Pakistani currency came under mild pressure at the resumption of trading post-Eid holidays on Thursday as the rupee depreciated Rs0.09 to a one-week low at Rs278.60/$ in the inter-bank market, triggered by higher demand for the greenback.

According to the State Bank of Pakistan’s (SBP) data, the rupee had closed at Rs278.51 against the greenback on Friday last week. The market stayed shut over the weekend on Saturday and Sunday and from Monday to Wednesday on account of Eid holidays.

The currency market saw an increased demand for US dollars when importers opted to buy the foreign currency at higher exchange rates to clear the backlog of cross-border payments which had emerged during Eid holidays.

Despite the latest depreciation, the local currency has remained largely stable and has fluctuated between Rs278 and Rs278.50/$ over the past couple of months.

The currency has gained a net 10.23%, or Rs28.50, in the last nine and a half months since hitting the record low close at Rs307.10/$ in the first week of September 2023.