Rupee Drops to 290 Against US Dollar in Open Market
Pakistani rupee falls to 290 against the US dollar in open market amid rising demand and weak reserves; interbank rate remains near 284.
Israr Ahmed
The Pakistani rupee continued its downward slide, hitting 290 against the US dollar in the open market. Currency dealers in major cities like Islamabad and Karachi reported strong demand for the dollar, pushing rates higher despite efforts by the State Bank of Pakistan to stabilize the market.
In the interbank market, the rupee also showed slight depreciation, closing around 284.2 against the dollar. This drop of nearly 25 paisa in a single session highlights the growing pressure on the local currency amid rising import bills and foreign exchange shortages.
Market Analysts’ Take
Experts point to a combination of factors driving the decline:
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Widening trade deficit
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Increased energy-related imports
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Surge in corporate dollar buying
Additionally, uncertainty around external inflows and delays in key funding from global lenders have added to the pressure on the rupee.
Impact on Remittances and Economy
The rupee’s fall offers a minor benefit to overseas Pakistanis sending money home through legal channels, as they receive better rates. However, economists warn that the long-term effects on inflation and import costs could outweigh any short-term gains.
Government and Fiscal Outlook
The government had projected an average rate of 290 against the dollar for the fiscal year. Further depreciation may put budgetary targets at risk, especially if foreign reserves or inflows from remittances and exports don’t improve.
Other Currency Trends
While the rupee struggled against the dollar, major currencies like the euro and British pound gained in the open market. The rupee, however, remained stable against regional currencies like the UAE dirham and Saudi riyal.
Central Bank’s Response
The State Bank of Pakistan is closely monitoring the situation. Officials suggest that regulatory measures, monetary tightening, and increased remittance inflows during summer could offer some support. Ultimately, the rupee’s stability will depend on external financing and geopolitical developments.
