Rupee dips 17 paisa to Rs278.82/$

The range-bound Pakistani rupee experienced a relatively steep depreciation in the interbank market on Tuesday, falling by 0.06%. At the close of trading, the rupee settled at 278.82, recording a loss of 17 paisas compared to the previous day's closing rate of 278.65, as reported by the State Bank of Pakistan (SBP).

The rupee's trajectory reveals significant trends since the currency first reached the Rs278 mark against the US dollar. For around the last two months, the rupee has seen only a fluctuation of less than 10 paisas.

Zafar Paracha, Secretary General of the Exchange Companies Association of Pakistan, provided context for the fluctuation. "Such a change is not significant in practical terms, especially when considering items priced less than Rs300," he said. He also attributed the current trend to delayed remittances caused by the closure of banks in New York on Sunday and Monday due to a public holiday.

Paracha further predicted that routine remittance flows would resume on Wednesday, likely strengthening the rupee and causing the dollar to retract to its previous position.

The currency market dynamics were partly influenced by the closure of US financial institutions on January 20, 2025. This was due to Martin Luther King Jr Day, a federal holiday observed annually to honour the civil rights leader's birthday.

Meanwhile, gold prices in Pakistan rose on Tuesday, mirroring an increase in international rates. In the local market, the price of gold per tola climbed by Rs300, reaching Rs283,200.

Similarly, the price of 10-gram gold rose by Rs257, selling at Rs242,798, according to data from the All-Pakistan Gems and Jewellers Sarafa Association (APGJSA).

On Monday, the price of gold per tola had already increased by Rs500, settling at Rs282,900.

Globally, gold prices also saw an uptick on Tuesday. According to the APGJSA, the international gold rate was $2,711 per ounce (including a $20 premium), reflecting a $3 increase during the day.

"While the price difference is not significant, gold remains on an upward trajectory," said Adnan Agar, Director of Interactive Commodities. "Currently, gold is holding around $2,726, and the critical level to watch is $2,730." He explained that if gold crosses this level, the market is likely to trend further upward.

In the coming days, certain factors could impact the long-term outlook. Agar pointed out that there is a warning regarding potential tariffs, particularly on Canada and Mexico, starting February 1. This development may create upward pressure on gold prices.