Pakistani currency on Wednesday maintained its gradual losing streak, ticking down by Rs0.02 to close at Rs278.39 against the US dollar in the inter-bank market apparently owing to a decrease in foreign currency supply and an increase in its demand.
Financial experts gave virtually no importance to the nominal drop, saying that the currency had largely remained stable.
However, according to the State Bank of Pakistan’s (SBP) data, the rupee has cumulatively depreciated 0.49%, or Rs1.36, in the past four weeks compared to the five-and-a-half-month high close of Rs277.03/$ reached in the last week of March 2024. Exchange Companies Association of Pakistan (ECAP) on Wednesday reported that the rupee inched down by Rs0.05 on a day-on-day basis and closed at Rs279.82/$ in the open market.
Latest central bank data indicated that import payments rose on a month-on-month basis in March and statements from high-ups also suggested that Pakistan’s imports may continue to rise gradually, which would lead to higher demand for the greenback.
Secondly, the inflow of remittances sent home by overseas Pakistanis has potentially slowed down after peaking in Ramazan and at Eid festival, resulting in contraction in dollar supply.
The rupee-dollar parity failed to maintain its uptrend despite a nine-year high current account surplus of $619 million reported by the central bank for March 2024.
Earlier, Pakistan’s foreign exchange reserves, held by the SBP, stood stable at $8.05 billion even after a foreign loan repayment of $1 billion on April 12, 2024.
Published in The Express Tribune, April 25th, 2024.
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