KARACHI: The Pakistani Rupee experienced a marginal decline of five paisas against the US Dollar on Monday, attributed to heightened demand for import and corporate payments.
The exchange rate in the interbank foreign exchange market concluded at Rs138.28 to the US dollar, compared to the previous Friday’s closing rate of Rs138.23.
Currency dealers have reported that the increased demand for dollars stems from importers making advance purchases due to the two consecutive weekly holidays. Additionally, the government’s announcement of a public holiday on February 5, 2019, in observance of Kashmir Solidarity Day, further contributed to the upsurge in demand for the greenback.
The interbank foreign exchange market commenced trading within the range of Rs138.35 and Rs138.40. Throughout the trading session, the market observed a high of Rs138.45 and a low of Rs138.22, ultimately settling at Rs138.28.
Despite the dip in the interbank market, the open market reflected a slightly different trend. In the cash-free market, the Rupee exhibited a slight gain against the US Dollar. The buying and selling rates for the US Dollar were recorded at Rs138.00 and Rs138.40, respectively. This represents a modest improvement from the previous Saturday’s closing rates of Rs138.00 and Rs138.50.
Currency analysts suggest that the slight depreciation in the interbank market can be attributed to the proactive dollar purchases by importers amid the recent back-to-back holidays. Importers often secure dollars in advance to meet their future payment obligations, a practice that tends to intensify ahead of extended holiday periods.
The government’s declaration of a public holiday in solidarity with Kashmir added to the demand for the US Dollar. Such announcements typically prompt increased corporate and individual transactions, impacting the overall demand-supply dynamics in the foreign exchange market.
While the Rupee experienced a minor setback in the interbank market, the open market’s resilience and the slight gain suggest a nuanced response to external factors. Traders and market participants are keenly monitoring developments, considering both domestic and international influences that could further shape the currency’s performance in the coming days.
As global economic conditions and geopolitical events continue to play a significant role in currency fluctuations, the State Bank of Pakistan and market participants will remain vigilant to ensure stability in the foreign exchange market. The Rupee’s performance against the US Dollar will likely continue to be influenced by a combination of economic indicators, market dynamics, and global factors.
