The Pak Rupee experienced a decline of 33 paisas against the US dollar on Tuesday, driven by increased demand for import payments and prevailing uncertainty in the equity market. The rupee closed at Rs159.00 to the dollar, down from last Friday’s rate of Rs158.67 in the interbank foreign exchange market.
Currency experts attributed the pressure on the rupee to the reopening of the market after a three-day closure, including the Pakistan Day holiday on March 23, 2020. The pent-up demand for dollars for import payments, particularly for purchases related to the upcoming holy month of Ramazan, contributed to the rupee’s decline.
“The higher demand for import payments, especially due to Ramazan-related purchases, put significant pressure on the local currency,” said a currency expert. Additionally, the market was unsettled by the uncertainty in the equity market, further exacerbating the rupee’s fall.
The recent decision by the Sindh government to enforce a lockdown in response to the rapid spread of the coronavirus has significantly impacted financial markets, adding to the volatility. The lockdown has jolted investor confidence, causing panic and contributing to the rupee’s depreciation.
Industries are now anticipating a bailout package from the government to mitigate the substantial economic and financial losses incurred due to the lockdown. The prolonged closure of businesses and disrupted supply chains have heightened the demand for such a relief package, as companies struggle to cope with the financial strain.
“The industry is expecting a bailout package from the government to offset the huge economic and financial losses caused by the lockdown,” said an industry representative. The government’s response to these expectations will be crucial in stabilizing the financial markets and restoring investor confidence.
The ongoing pandemic continues to challenge the stability of Pakistan’s economy, with currency fluctuations and market uncertainties reflecting broader concerns. As the country navigates these turbulent times, effective government intervention and strategic economic measures will be essential to support recovery and ensure financial stability.
In the coming days, market watchers will closely monitor the government’s actions and their impact on both the currency and equity markets. The interplay between public health measures and economic policies will be critical in determining the trajectory of the Pak Rupee and the overall financial landscape.
