KARACHI: The US dollar gained 19 paisas against the Pakistani Rupee in the interbank foreign exchange market on Monday, closing at Rs164.19 compared to the previous session’s close of Rs164.00. This appreciation comes as a result of increased demand for the dollar to settle import payments ahead of midweek public holidays.
According to market analysts, the local interbank market saw heightened dollar buying due to the government-declared public holidays on August 18 and 19, 2021, in observance of Ashura e Muharram. The reduced number of trading days prompted importers and businesses to expedite foreign payment settlements, creating additional demand for the greenback.
The current exchange rate marks the dollar’s highest level in almost 11 months, a rate last recorded on October 7, 2020. Analysts noted that this surge reflects a combination of external and domestic pressures. Rising international oil prices have increased Pakistan’s import bill, while domestic demand for finished goods and industrial raw materials continues to climb, further pushing up demand for foreign currency.
Experts believe the rupee may remain under pressure in the short term as global commodity prices stay elevated and Pakistan’s trade deficit widens. Moreover, the interbank market could see continued volatility with upcoming payments for energy and manufacturing sector imports.
The State Bank of Pakistan (SBP) is closely monitoring the situation to ensure liquidity in the interbank market, as exchange rate fluctuations could impact inflation and broader economic stability.