Pakistani rupee experienced further depreciation on Tuesday against the US dollar, marking a continuous downtrend for the 12th consecutive session.
According to the Forex Association of Pakistan, the interbank rate for the dollar reached Rs287, signifying a loss of Rs1.71 compared to the previous day’s rate of Rs285.29. Simultaneously, the open market rate for the dollar stood at Rs287.5 during the same period.
The sustained decline in the rupee since October 20 has amounted to a 2.9% loss, eroding the recovery observed in September post a crackdown on illegal currency markets. Bankers and currency experts attribute the rupee’s continued weakness to a combination of factors, including the short supply of dollars and sluggish growth in exports.
The announcement of the general elections on February 8, 2024, has introduced additional uncertainty into the political and economic landscape, contributing to the prevailing negative sentiment.
Importers’ increased demand for dollars, driven by the desire to secure future costs amidst a potential rise in the dollar’s value, has also played a role in the current depreciation trend.
Insights from Financial Experts:
Zafar Paracha, the General Secretary of the Exchange Companies Association of Pakistan, acknowledged the evolving sentiments, highlighting how exporters have ceased selling their dollars amidst growing pessimism about the rupee’s strengthening prospects.
He emphasized that periodic attempts to undermine the rupee and create panic persist, even as Pakistan’s financial credentials remain favorable. Additionally, Paracha noted the impact of Afghan refugees leaving the country, potentially contributing to dollar smuggling. Despite these challenges, he expressed optimism about Pakistan’s promising financial indicators, citing robust company results and the stock exchange’s record-breaking performance.
