Karachi, July 24, 2024 – The Pakistani rupee continued its downward trend for the third consecutive trading day on Wednesday, weakening to PKR 278.50 against the US dollar in the interbank foreign exchange market.
The rupee’s value fell by 9 paisas from the previous day’s closing of PKR 278.41. This ongoing slide follows the rupee’s decline from PKR 278.13 recorded on July 19, 2024, indicating a sustained pressure on the local currency.
Currency analysts attributed this persistent weakening to several factors, primarily the increased demand for the US dollar driven by import and corporate payment requirements. The pressure on the rupee has been exacerbated by recent political unrest, which has further destabilized the local currency. This political uncertainty has led to reduced investor confidence, prompting a higher demand for the stability offered by the dollar.
Furthermore, global economic conditions have also played a role in the rupee’s depreciation. The strengthening of the US dollar against other major currencies has exerted additional pressure on the rupee. This trend is largely influenced by the US Federal Reserve’s monetary policy and the overall global economic outlook.
Despite the current challenges, analysts maintain an optimistic outlook for the rupee. They cite improved economic indicators, such as higher foreign exchange reserves and a narrowing current account deficit, as potential stabilizing factors. Additionally, the recent staff-level agreement (SLA) with the International Monetary Fund (IMF) is seen as a positive development. The IMF’s $7 billion extended fund facility for Pakistan is expected to bolster the country’s financial stability and support the rupee in the medium term.
The ongoing depreciation of the rupee highlights the delicate balance of Pakistan’s foreign exchange market, influenced by both internal and external factors. As the country navigates its economic challenges, the interplay between demand for the dollar and political developments will remain crucial in determining the rupee’s trajectory.
In the short term, the rupee may continue to face downward pressure if the demand for dollars persists. However, the IMF agreement and potential improvements in economic conditions could provide a stabilizing effect in the near future. Analysts recommend closely monitoring the situation and staying informed about global economic trends and domestic political developments.