Rupee falls by 26 paisas against dollar

Rupee falls by 26 paisas against dollar

The Pakistani Rupee experienced a depreciation of 26 paisas against the US Dollar, closing at Rs138.81 in the interbank foreign exchange market. This decline comes after last Friday’s closing of Rs138.55, reflecting heightened demand for dollars driven by import and corporate payment obligations.

Dealers attributed the depreciation to the market reopening after two weekly holidays, which typically sees an accumulation of deferred demand. As businesses and importers rushed to settle their payments, the increased dollar demand put pressure on the Rupee, leading to its depreciation.

The foreign exchange market opened with the Rupee trading in the range of Rs138.60 to Rs138.70. Throughout the session, the market recorded a high of Rs138.82 and a low of Rs138.55, before settling at Rs138.81 by the end of the trading day.

In contrast, the exchange rate in the open market remained stable. The buying and selling rates for the dollar were recorded at Rs138.50 and Rs138.80, respectively, mirroring the rates from Saturday’s cash ready market. This stability in the open market suggests that the pressure on the Rupee was predominantly from the interbank market, where larger corporate transactions take place.

The depreciation of the Rupee highlights the ongoing challenges faced by the Pakistani economy, particularly in managing its balance of payments. Increased import bills and corporate foreign exchange requirements continue to exert pressure on the national currency.

Despite this, the central bank’s interventions and monetary policies aim to stabilize the Rupee. The State Bank of Pakistan (SBP) monitors foreign exchange movements closely and employs measures to smooth out excessive volatility, ensuring a more stable economic environment.

Looking ahead, currency market analysts expect that the Rupee’s performance will remain sensitive to import payment schedules and corporate demand dynamics. Any significant changes in these areas could either exacerbate the depreciation or provide some relief, depending on the volume and timing of dollar outflows.

As the global economic situation evolves, particularly with fluctuating oil prices and trade imbalances, Pakistan’s currency market will need to adapt continuously. Stakeholders, including policymakers and businesses, will be keeping a close watch on these developments to manage their foreign exchange risks effectively and maintain financial stability.