The Pakistani Rupee (PKR) is likely to remain under pressure against the US Dollar next week due to import payments and trade deficit concerns.
Furthermore, the upcoming announcement of the federal budget for 2023-2024 has heightened the demand for foreign currency. As the corporate sector approaches the end of their financial year on June 30, they are actively accumulating dollars for repatriation purposes.
Throughout the week, commencing from May 29, 2023, PKR faced stability as it remained range-bound against the US Dollar due to various factors affecting the currency.
The import payments, increased corporate transactions, and political and economic uncertainties have collectively impacted investor confidence, resulting in a loss for the local currency.
The upcoming announcement of the federal budget for 2023-2024 on June 09, 2023, has also intensified the demand for foreign currency. Furthermore, the corporate sector, in preparation for the closing of its financial year on June 30, is accumulating dollars for repatriation purposes.
The local currency on May 29, 2023, closed at PKR 285.42, experiencing a decline of 27 paisas against the US Dollar compared to the previous closing rate of PKR 285.15 recorded on May 26, 2023. Experts attributed this devaluation to the increased demand for the US Dollar driven by import and corporate payments. Such demand rises during this period as businesses fulfill their import obligations, while corporate payments further amplify the need for dollars, consequently depreciating the Pakistani Rupee.
READ MORE: PKR Depreciates by 30 Paisas Against US Dollar Due to Rising Import Demand
Closing at PKR 285.35 against the US Dollar on May 30, 2023, the Pakistani Rupee showed a slight improvement from the previous closing rate of PKR 285.42 recorded on May 29, 2023. Experts credit this appreciation to the positive impact of exports and remittances, which have contributed to the overall stability of the Pakistani Rupee.
At the end of the interbank foreign exchange market, the local currency settled at PKR 285.47 on May 31, 2023, marking a decrease of 12 paisas against the US Dollar compared closing rate of PKR 285.35 on May 30, 2023. Currency analysts highlight the heightened demand for the US Dollar and the prevailing political and economic uncertainties in the country as exacerbating factors for the challenges faced by the Pakistani Rupee. The lack of clarity regarding political dynamics and economic policies has negatively affected investor confidence and subsequently impacted the local currency.
On June 01, 2023, the local currency closed at PKR 285.38 in the interbank foreign exchange market, indicating an increase of 9 paisas against the US Dollar from the closing rate of PKR 285.47 on May 31, 2023. The appreciation is attributed to the continued boost in exports and remittances, which have contributed to the overall stability of the Pakistani Rupee.
READ MORE: Rupee inches up by 9 paisas against dollar in interbank
The exchange rate concluded at PKR 285.68 against the US Dollar on June 02, 2023, compared to the closing rate of PKR 285.38 on June 01, 2023, in the interbank foreign exchange market. Experts associate the depreciation of the local currency to the mounting demand for import payments ahead of the announcement of the federal budget for 2023-2024, scheduled on June 09, 2023. Additionally, the corporate sector, with its financial year closing on June 30, is gathering dollars for the repatriation of profits and dividends.
Despite the challenges, the Pakistani Rupee maintained a range-bound position throughout the week, with its stability influenced by various economic factors and market dynamics. The forthcoming budget announcement and the corporate sector’s activities are expected to continue impacting the currency’s performance in the days to come.
READ MORE: PKR faces slight loss against dollar in interbank
