Karachi the Pak Rupee Depreciated in the early trade on Tuesday owing to higher import and corporate payment demand

Karachi the Pak Rupee Depreciated in the early trade on Tuesday owing to higher import and corporate payment demand

In the early trade on Tuesday, the Pakistani Rupee experienced a depreciation against the US Dollar, primarily attributed to increased demand for imports and corporate payments.

According to reports from the interbank foreign exchange market, the dollar is currently being traded at Rs138.91, marking a rise from Monday’s closing rate of Rs138.72 in the foreign currency market.

Although the rupee showed promise with a substantial gain of 51 paisas in early trading on Monday, it failed to sustain those levels and ultimately settled with a more modest gain of 11 paisas by the end of the day. The local currency had initially surged following positive developments, particularly the signing of significant agreements amounting to $20 billion between Pakistan and Saudi Arabia.

Currency experts have weighed in on the situation, explaining that the rupee is facing pressure primarily due to scheduled foreign payments by the country. The demand for the US Dollar has intensified as Pakistan grapples with meeting its obligations, impacting the exchange rate.

The recent boost in the value of the rupee on Monday was attributed to the bilateral agreements signed with Saudi Arabia. The $20 billion agreements cover various sectors, including energy, petrochemicals, and infrastructure, providing a temporary respite to the Pakistani economy. However, the currency failed to maintain its upward trajectory as other economic factors came into play.

Analysts highlight the importance of understanding the dynamics of the foreign exchange market, especially during periods of increased demand for the US Dollar. Import payments and corporate transactions often contribute to fluctuations in the exchange rate, creating a delicate balance that policymakers must navigate.

The depreciation of the rupee signals the challenges faced by the Pakistani economy, as it grapples with a delicate economic landscape marked by external pressures and the need to meet financial commitments. The country’s foreign exchange reserves and trade balance have been key areas of concern, prompting careful monitoring by economic experts and policymakers.

The State Bank of Pakistan (SBP) is expected to closely observe the situation and may take measures to stabilize the currency if the depreciation trend persists. The central bank plays a crucial role in managing the country’s monetary policy and intervening in the foreign exchange market when necessary.

As the situation unfolds, businesses and individuals involved in international trade are advised to stay vigilant and adapt to the changing dynamics of the currency market. The resilience of the Pakistani Rupee will depend on various economic factors, including government policies, external support, and efforts to enhance the country’s economic stability.