KARACHI: The dollar appreciated by 16 paisas against the Pakistani Rupee (PKR) on Wednesday, closing at Rs168.68 in the interbank foreign exchange market, up from the previous day’s rate of Rs168.52. The rise was attributed to increased demand for the dollar, driven primarily by import and corporate payment requirements.
Currency market experts highlighted that end-of-quarter activities have fueled higher demand for the dollar. Foreign companies operating in Pakistan often remit profits and dividends to their parent organizations abroad during this period, leading to a surge in demand for the greenback. This quarterly pattern has become a key factor influencing dollar movements in the local market.
Import payments have also added to the demand for dollars, as businesses settle their international obligations. The corporate sector, preparing for financial reporting and external commitments, further amplified the need for dollar liquidity.
Experts emphasized the critical importance of maintaining a steady inflow of foreign currency to stabilize the rupee. They suggested that proactive measures, including increased exports and higher remittances, could help offset the pressure caused by rising dollar demand. Without sufficient inflows, the rupee could face additional depreciation in the near future.
The ongoing fluctuations in the dollar exchange rate reflect the broader economic challenges faced by Pakistan. Import bills, combined with external debt repayments, have created consistent upward pressure on the dollar. As a result, sustaining a balanced foreign exchange market remains a significant challenge for policymakers.
While the dollar’s strength may benefit exporters by making their goods more competitive internationally, the rising exchange rate poses challenges for importers and consumers, increasing costs for essential commodities and raw materials.
As the end of the financial quarter approaches, currency market participants anticipate further fluctuations in the dollar exchange rate. The government and the central bank will need to work in tandem to manage foreign exchange reserves and ensure the rupee’s stability amidst external pressures.
For now, the dollar’s position as the dominant currency continues to influence economic activity in Pakistan, with its impact felt across various sectors.