In the inter-bank market, the Pakistani rupee hit an almost 10-month low at 163.67 rupees against the US dollar yesterday, August 2. Currency market analysts think this scenario owes to increased US dollar demand for import payments and scanty inflows.
We think this latest foreign exchange news is important to share with our readers. We believe it can assist them in their trading decisions involving the US dollar and the Pakistani rupee this week.
According to the report posted online by Geo TV, a news outlet based in Pakistan, the Pakistani rupee extended its recent sequence of posting losses versus the US dollar in the interbank market. Its closing on Monday at 163.67 to the greenback is its lowest since October 8, 2020.
The Pakistani rupee depreciated by 0.76 percent or 1.24 rupees against the US dollar. Additionally, it plummeted by 0.92 percent or 1.50 rupees versus the official currency of the United States in the open market.
The currency of Pakistan concluded at 164.20 per US dollar, compared with 162.70 in the previous session. Since last month, the Pakistani rupee has reportedly been facing pressure and has fallen by 3.9 percent.
Dealers remarked that this situation is due to import payments, especially for oil. The Pakistani rupee is also likely to lose further ground, with the demand for hard currency anticipated to persist amid subdued US dollar inflows.
Furthermore, this week, there are large oil payments lined up. Dealers pointed out that inflows from remittances and export proceeds were not enough to meet the importer demand.
Yaqoob Abubakar, an analyst for financial markets company Tresmark, relayed that the Pakistani rupee has remained under pressure early this week. He associated this trend with the high demand for oil, machinery, and vaccine imports and the short supply of US dollars in the market.
Abubakar also said that the surge in COVID-19 cases in Pakistan and the partial lockdown in Karachi had altered traders’ sentiments. Meanwhile, Mustafa Mustansir, Taurus Securities’ head of research, cited that the US dollar had been going up.
He explained that this trend is primarily because of the Federal Reserve System’s expectations of an earlier hike in interest rates and robust US economic data. Mustansir pointed out that the jobs data was pretty good for June 2021, and strong figures are expected for last month.
He also relayed that wages had been increasing in the United States, making everything point towards strong economic recovery in the world’s largest economy. We understand that the Pakistani rupee’s value continues to weaken versus the US dollar.
Various factors are at play with this latest trend, including the COVID-19 pandemic adversely impacting Pakistan. We recommend our readers, especially those trading Pakistani rupees to US dollars, to monitor these developments in the currency markets. If they find the situation unfavorable for them, we suggest they hold on to their currencies and analyze the happenings.