Rupee falls by 10 paisas on high import demand

Rupee falls by 10 paisas on high import demand

KARACHI – The Pakistani Rupee witnessed a 10-paisa decline against the US Dollar on Tuesday, primarily driven by surging demand for imports and contract payments.

The rupee closed at Rs138.93 to the dollar in the interbank foreign exchange market, down from the previous day’s closing rate of Rs138.83.

At the start of the day, the interbank foreign exchange market saw the rupee trading within the range of Rs138.84 and Rs138.87. The market reached its peak at Rs138.94 and touched a low of Rs138.84 before closing at Rs138.93.

In the open market, the exchange rate showed minimal fluctuations. The buying and selling rates for the dollar were noted at Rs139.00 and Rs139.50, respectively, compared to the previous day’s closing rates of Rs139.00 and Rs138.30 in the cash-free market.

The decline in the rupee’s value against the US Dollar can be attributed to increased demand for the greenback, particularly to meet import payments and fulfill contract obligations. These factors have led to a higher demand for the US Dollar in the foreign exchange market, causing the rupee to weaken.

Economic analysts suggest that this minor fluctuation in the exchange rate is a result of the ongoing dynamics between supply and demand for foreign currencies. As Pakistan continues to engage in international trade and business transactions, the demand for the US Dollar remains significant.

The rupee’s exchange rate, both in the interbank and open markets, tends to fluctuate in response to changes in global economic conditions, international trade dynamics, and domestic economic policies. The State Bank of Pakistan (SBP) plays a pivotal role in managing these fluctuations, ensuring stability in the foreign exchange market when necessary.

While the rupee may experience periodic fluctuations, the SBP’s intervention aims to prevent any significant depreciation that could disrupt the country’s economic stability. The central bank monitors the exchange rate closely and intervenes when needed to maintain a reasonable level of control over the currency’s value.

Overall, the recent decline of 10 paisas against the US Dollar represents a relatively modest change in the currency’s value and is well within the expected range of fluctuations that occur in the foreign exchange market. The SBP continues to focus on managing the country’s monetary policy to support economic growth and stability.

As Pakistan remains an integral player in the global trade and finance arena, fluctuations in exchange rates are inevitable. The SBP, along with other economic authorities, remains vigilant in managing these fluctuations to ensure that the country’s economy remains robust and competitive.

The slight depreciation of the rupee is part of the normal ebb and flow of the foreign exchange market, influenced by various economic factors both domestically and internationally. It is important to note that the SBP is well-equipped to address any challenges and maintain a stable economic environment for Pakistan.