KARACHI: The Pakistani rupee depreciated to a 17-month low on Thursday, settling at 282.06 against the US dollar in the inter-bank market. This marks the weakest level since December 27, 2023, when the rupee last traded near 282.
On Wednesday, the rupee closed slightly stronger at 281.97 against the greenback. Analysts attribute the decline primarily to rising import demand putting pressure on the local currency. Sana Tawfik, head of research at Arif Habib, stated, “A rise in import demand has put pressure on the currency.”
Globally, the US dollar faced mixed signals amid fiscal concerns and a weak Treasury bond auction. The US dollar slipped to a two-week low against the Japanese yen, trading at 143.27 yen in early Asian sessions, its weakest since May 7. This decline was fueled by a lackluster 20-year bond sale and Moody’s recent downgrade of the US credit rating from triple-A.
Meanwhile, investors turned to alternatives like Bitcoin and gold. Bitcoin surged to a fresh all-time high, last up 1.6% at $110,049.82 after reaching $110,636.58 earlier in the day. Gold prices also climbed to nearly a two-week peak of $3,325.79 per ounce.
Oil prices dropped 1% amid talks by OPEC+ to increase production in July, raising concerns about oversupply. Brent crude fell to $64.27 a barrel, while US West Texas Intermediate crude declined to $60.98.
In the open market, the Pakistani rupee also weakened. It lost 15 paise in both buying and selling against the dollar, closing at 283.09 and 284.15, respectively. The rupee similarly lost value against other currencies including the Euro, UAE Dirham, and Saudi Riyal.
The ongoing depreciation of the rupee reflects persistent economic challenges amid rising import demand and global market fluctuations, posing a continued test for Pakistan’s economic stability.
