In a significant financial development, the rupee, Pakistan’s Rupee , experienced a sharp drop to a historic low of 299 against the US dollar. This 0.63% depreciation occurred within the interbank market and was primarily driven by a recent relaxation in import restrictions, which subsequently elevated the demand for the US dollar.
According to the State Bank of Pakistan (SBP), the rupee exhibited a notable decline of 1.88 against the dollar during the trading session, ultimately closing at 299.01. This recent low surpasses the previous record of 298.93, registered on May 11.
The rupee’s performance has been volatile in recent days. Just a day prior, it closed at 297.13 against the dollar, showcasing a marked difference from Friday’s closing rate of Rs 295.78.
Tahir Abbas, the Head of Research at Arif Habib, predicted that the rupee would likely continue trading between the range of 295 and 305 against the dollar for the immediate future. Abbas attributed this downward trend to a combination of factors. The relaxation in import constraints and the clearance of a backlog for goods and services have contributed to the rupee’s slide. Additionally, multinational corporations’ ability to repatriate profits has added to the outflow of rupees.
Adnan Agar, the Director of AA Commodities, highlighted the influence of political factors on the depreciation. He stated that apprehensions surrounding potential delays in general elections have contributed to an air of uncertainty. This uncertainty, in turn, could hinder the fulfillment of commitments from international financial institutions like the International Monetary Fund (IMF) and other global lenders.
Agar emphasized that as long as the political landscape remains uncertain, questions regarding investments and loans to the country will linger. Until there is clarity on the political situation, he believes the rupee’s value will likely continue to experience challenges.
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The plunge to a historic low of 299 against the US dollar has generated concern within the financial community. Factors such as eased import restrictions, repatriation of profits by multinational corporations, and political uncertainties are contributing to the currency’s ongoing volatility. The situation calls for a watchful eye on both economic and political developments in the coming days.
