KARACHI: The Pakistani Rupee faced depreciation of 64 paisas against the US Dollar on Friday, driven by increased demand for foreign currency to settle import payments as the trading week came to a close.
The rupee concluded at Rs154.94 against the dollar in the interbank foreign exchange market, marking a decline from the previous day’s closing rate of Rs159.30. This consistent downward trend highlights ongoing pressures on the local currency amid fluctuating market dynamics and growing reliance on imports.
Currency market experts attributed the rupee’s depreciation to heightened demand for the dollar, which typically occurs on the last trading day of the week as businesses rush to finalize their payment obligations. They pointed out that such demand surges often place pressure on the exchange rate, particularly in the absence of corresponding inflows of foreign exchange.
Pakistan’s economy continues to grapple with a range of challenges, including a high import bill and relatively slower inflows of foreign exchange through exports and remittances. These factors contribute to the rupee’s vulnerability to fluctuations in the forex market. Moreover, uncertainties surrounding global markets, coupled with the country’s structural economic issues, have compounded pressures on the local currency.
The depreciation of the rupee impacts various aspects of the economy. For businesses reliant on imported goods, it increases costs, which can lead to higher prices for consumers. On the other hand, exporters may benefit slightly as their goods become relatively cheaper for foreign buyers. However, the broader implications, including inflationary pressures and a heavier burden on external debt repayments, remain areas of concern.
Market analysts have called for measures to stabilize the exchange rate, including steps to boost foreign currency reserves, attract foreign investment, and improve the trade balance. A more sustainable approach to managing the exchange rate would reduce volatility and strengthen market confidence.
As the week concludes, businesses and market participants are closely monitoring developments, anticipating potential interventions by policymakers to curb further depreciation and stabilize the local currency in the coming weeks.