KARACHI: Pakistani rupee weakened against the US dollar by 14 paisas on Thursday and depreciated to 287.60 in the interbank market.
The State Bank of Pakistan (SBP) said in a tweet that the rupee opened at 287.46 against the dollar in the interbank market and closed at 287.60, showing a depreciation of 14 paisas (-0.05 percent).
During the current fiscal year 2023-24, Pakistani rupee has shed Rs1.61 against the US dollar in the interbank market, while it plummeted by Rs60.17 against the greenback in the current year.
Similarly, the local unit depreciated against the greenback in the open market by Re1 (-0.32 percent). The rupee was quoted in the range of 295-297 against the dollar in the open market as compared to 294-296 a session earlier. In the black market/Hundi, the dollar remained at Rs310.
Currency experts attributed this volatility to the uncertain interim setup that ensued after the dissolution of the National Assembly. The assembly was dissolved a few days before its scheduled tenure completion, as President Dr Arif Alvi approved the prime minister’s advice to dissolve the assembly.
In a related development, workers’ remittances decreased by 19.28 percent on a year-on-year basis in July to $2.03 billion, compared to $2.51 billion in the same month of last year. Similarly, on a monthly basis, workers’ remittances dropped by 7.33 percent as compared to $2.19 billion in June. The inflows mainly came from Saudi Arabia, the United Arab Emirates, the United Kingdom, and the United States of America, with Saudi Arabia being the largest contributor at $486.7 million.
A recent decision by the State Bank of Pakistan (SBP) to allow commercial banks to initiate import payments by opening letters of credit has further strained the local currency. In addition, declining foreign exchange reserves have added pressure to the exchange rate. As of July 27, 2023, Pakistan’s foreign exchange reserves had decreased to $13.464 billion, marking a decline of $70 million from the previous week. The State Bank of Pakistan’s reserves stood at $8.154 billion, showing a $32 million decrease from the prior week. – TLTP