Rupee weakens by 45 paisas against dollar on high import payment demand

Rupee weakens by 45 paisas against dollar on high import payment demand

The Pakistani Rupee experienced a depreciation of 45 paisas against the US Dollar on Monday, ending the day at Rs159.27 in the interbank foreign exchange market. This decline comes after a period of consecutive gains, attributed to heightened demand for import and corporate payments.

Last Friday, the Rupee had closed at Rs158.82 to the dollar, marking a six-day streak of appreciation driven by robust export receipts and inflows from workers’ remittances. Currency experts noted that the resurgence in dollar demand was significant as the market reopened following the two-day weekend.

The latest increase in the dollar’s value has interrupted the Rupee’s recent upward momentum. On the previous trading day, the Rupee had strengthened by 25 paisas, closing at Rs158.82 compared to Rs159.07 on the preceding day. This rally saw the Rupee appreciating by Rs1.36 over six days, having closed at Rs160.18 on February 3, 2021.

Experts attributed the Rupee’s prior gains to improved foreign currency inflows from exports and remittances. Pakistan’s export performance has been notably strong, with exports exceeding $2 billion for four consecutive months as of January 2021, a feat not achieved in the past eight years, according to an official statement.

The consistent inflow of export receipts and remittances has been crucial in bolstering the Rupee against the Dollar. These inflows not only provide much-needed foreign exchange but also reflect underlying economic activities that support the currency’s value.

Despite the recent setback, the Rupee’s performance in the past weeks has been encouraging for market observers. The temporary weakness seen on Monday is viewed as a market adjustment rather than a reversal of the positive trend observed recently.

Market analysts continue to monitor the factors influencing currency movements closely. Import and corporate payment demands remain significant drivers, while export performance and remittance inflows are critical for sustaining the Rupee’s strength.

As global economic conditions evolve, the Pak Rupee’s trajectory will likely depend on balancing these factors, with stakeholders keeping a vigilant eye on both domestic and international developments affecting the foreign exchange market.