Pakistan’s Rupee Stabilizes at Rs280 Against the US Dollar

The market’s belief that the rupee was weakening due to increased demand for the US dollar was confirmed as the central bank’s foreign exchange reserves decreased by $220 million to $7.5 billion, according to the latest weekly update. This surge in demand for the US dollar and the decline in foreign currency reserves followed the government’s decision to allow foreign companies to repatriate profits and dividends to their overseas headquarters.

Meanwhile, the local gold pricing body adjusted bullion prices upward by Rs2,900 to Rs211,350 per tola (11.66 grams), in line with the global commodity market’s upward trend. The All Pakistan Saraf Gems and Jewellers Association reported that the price of precious metals surged by $20 to $1,990 per ounce (31.10 grams) in the London market. The combination of rupee depreciation and increased gold demand prompted the pricing committee’s rate adjustment.

Furthermore, recent trends suggest an increase in the output of large-scale manufacturing (LSM) industries and the agriculture sector, indicating greater consumption of imported raw materials. In the open market, the rupee remained stable at Rs282/$ for the second consecutive day, according to the Exchange Companies Association of Pakistan.

Pakistan’s currency, the rupee, continued its downward trend for the fourth consecutive day, closing at a new one-week low of Rs280.09 against the US dollar, as reported by the State Bank of Pakistan (SBP). The rupee posted a drop of 0.07%, or Rs0.21, marking a cumulative loss of about half a percentage point, or Rs1.28, over the past four days.

While this policy put pressure on the rupee, it also sent a strong signal to global investors that Pakistan is open for profit repatriation and new investment projects, potentially leading to fresh capital inflows into the country. Market observers noted that the demand for dollars outpaced their supply, primarily driven by the need to pay for imports and service foreign debts.

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