Rupee loses 21 paisa on imports, global woes

KARACHI:

The Pakistani rupee on Monday lost 21 paisa, or 0.07%, reaching its lowest level in 18 months against the US dollar amid rising import demand and evolving geopolitical factors.

By the end of trading, the rupee stood at 283.17/$, down 21 paisa compared to the previous day. This marks the first time the currency has touched the 283 level since December 2023.

The rupee remains under pressure due to increased import payments and ongoing debt repayments. Over the past week, the currency lost 0.28%, or 79 paisa, settling at 282.96 against the dollar, compared to the prior week's close at 282.17, as per data from the State Bank of Pakistan (SBP).

The rupee has depreciated by 1.63% so far in the current calendar year and by 1.71% in the current fiscal year, according to Ismail Iqbal Securities.

Exchange Companies Association of Pakistan General Secretary Zafar Paracha said the rupee has remained relatively stable compared to past crises, despite recent geopolitical tensions. He noted that unlike previous situations when the dollar surged sharply, the market has been managed better this time around.

However, ongoing tensions and uncertainty have led to a slight depreciation of the rupee and rise in gold prices. Paracha also highlighted reduced remittances and increased capital outflows during recent India-Pakistan tensions, with some investors turning to alternatives like cryptocurrencies. Gold prices in Pakistan fell on Monday, mirroring the decline in the international market where bullion slipped over 1% as investors booked profits following an eight-week high. Market participants also remained cautious due to escalating Israel-Iran tensions and the upcoming US Federal Reserve policy meeting.

In the domestic market, the price of gold per tola dipped Rs700 to settle at Rs362,300. Likewise, the price of 10 grams of gold decreased Rs600 to Rs310,613, according to the All Pakistan Sarafa Gems and Jewellers Association.