Rupee depreciates by 40 paisas against dollar in early trading

Rupee depreciates by 40 paisas against dollar in early trading

Karachi – The Pakistani Rupee faced a depreciation of 40 paisas against the US dollar in early trade on Monday, influenced by heightened demand following the weekly holidays.

The exchange rate reached Rs138.80 to the dollar in the foreign exchange market, highlighting the ongoing pressure on the national currency.

The interbank foreign exchange market has witnessed a consistent depreciation trend, with the rupee falling by 16 paisas last Friday. The exchange rate concluded at Rs138.40 to the dollar on Friday, marking a decline from the previous day’s closing rate of Rs138.24 in the interbank foreign exchange market.

Market sources indicate that traders are anticipating a further decline in the value of the rupee, particularly as Pakistan enters into a new International Monetary Fund (IMF) loan program. The economic landscape in Pakistan has been marked by challenges over the past year, reflecting in the fiscal situation and currency dynamics.

The finance ministry has reported revaluation losses due to the appreciation of international currencies against the US Dollar and the depreciation of the Pakistani Rupee against the greenback. These factors have collectively contributed to an increase in the total public debt by approximately Rs 1.2 trillion.

As Pakistan navigates its economic challenges, market participants are closely monitoring the exchange rate movements and anticipating potential impacts on inflation, trade balances, and the overall economic health. The anticipation of a new IMF loan program adds a layer of complexity to the economic landscape, as it may come with conditions and reforms aimed at stabilizing the country’s finances.

The depreciation of the rupee against the dollar can have cascading effects on various sectors, including imports, exports, and inflation. It is essential for policymakers and financial authorities to employ effective measures to manage the currency’s stability and ensure the resilience of the economy.

While the current depreciation is a reflection of the prevailing economic conditions, it underscores the importance of proactive economic management to address fiscal challenges and create an environment conducive to sustainable growth. The government, in collaboration with relevant stakeholders, will likely need to implement strategic measures to stabilize the currency and promote economic stability.

As the situation unfolds, market participants will be keenly watching for developments, policy announcements, and economic indicators that provide insights into the trajectory of the Pakistani economy. The resilience and adaptability of Pakistan’s economic policies will play a crucial role in steering the country through these challenging times and fostering long-term economic prosperity.