Pakistani rupee shows some spine against US dollarBreaking

May 24, 2023

The Pakistani rupee showed some spine against the US dollar in the interbank trading on Wednesday, after sustaining losses for five consecutive sessions. According to the data made available by the forex dealers, the local currency went up by 40 paisas against the greenback and was currently being traded at Rs286.75. On Tuesday, the Pakistani rupee was depreciated by 0.21% in the interbank market. The currency settled at 287.15, a loss of 59 paisas as per the State Bank of Pakistan (SBP).

The gap between open and bank rates has further widened. The Exchange Companies Association of Pakistan reported the closing price of the dollar at Rs305 compared to Rs301 in the previous session. The rising dollar price gap has created fear among the stakeholders that the exchange rate could face another shock and the local currency would fall to Rs300 in the interbank.

The financial circles believe that the banks are under pressure from the federal government to open letters of credit for imports without taking the SBP into confidence. The central bank has been trying to minimise imports, reduce the current account deficit and avoid a default-like situation. However, the political government is under intense pressure from the manufacturing and export sectors to allow imports or face a negative economic growth rate.

Credit: Independent News Pakistan-INP