Pakistani Rupee Decreases Against Dollar in Open Market
Rupee losses Rs3.02 in interbank market to close at Rs291.51
LAHORE MIRROR — The Pakistani rupee experienced a significant decline against the US dollar on Tuesday, witnessing a drop of Rs4 in the open market.
This depreciation was attributed to ongoing political uncertainties, declining exports, and a decrease in remittances.
In the open market, the rupee concluded at Rs300 against the US dollar. Meanwhile, in the interbank market, the rupee experienced a devaluation of Rs3.02 against the greenback, closing at Rs291.51.
Zafar Paracha, the General Secretary of the Exchange Companies Association of Pakistan (ECAP), highlighted that the depreciation of the rupee had been anticipated following the assumption of power by the caretaker government. Paracha emphasized that the interim administration is expected to align its actions with the conditions set forth by the International Monetary Fund (IMF), which were previously avoided by the elected government.
Furthermore, Paracha noted that the recent decision to eliminate restrictions on imports, aimed at fulfilling IMF requirements, also contributed to the rupee’s devaluation. This move is anticipated to exert pressure on the country’s foreign exchange reserves.
Paracha further elaborated that the rupee’s decline was influenced by the reduction in remittances from overseas Pakistani workers, amounting to $2 billion in the initial month of the current fiscal year. Additionally, the decrease in exports played a role in the rupee’s depreciation.
He predicted that the rupee might continue to weaken against the US dollar, a phenomenon aligning with the IMF’s conditions and aimed at minimizing the disparity between the open and interbank markets.
The ECAP General Secretary also pointed out the presence of a grey market and the escalation of security incidents within Pakistan as contributing factors to the strengthening of the dollar against the rupee.