Weekly currency update: Dollar may surpass all time-high of Rs240 next week

A currency dealer in Karachi counts Pakistani rupees. Photo: Reuters/File

KARACHI: Given the strong demand for dollars and the drying up of greenback reserves in the country, analysts have predicted that local unit It is expected to continue its downward trend during the next week.

The dollar, which has been trending higher globally, settled at Rs 236.84 at the close of business on Friday, against last week’s close of Rs 228.18. News Reported

The rupee’s weekly loss reached Rs 8.66 against the greenback.

Pakistani Currency It remained depressed throughout the week and lost its value in every trading session. This was mainly due to increased payment pressures as well as the strengthening of the dollar against other currencies in the global market.

Analysts say the floods clouded the country’s economic landscape after devastating the agriculture sector, putting pressure on the country’s overall economic indicators.

“The biggest loss came from the flooded cotton crop. Now textile millers are looking for import options in global cotton markets to keep the wheels of the local industry moving,” analysts said.

According to estimates, the textile industry has to import cotton worth billions of rupees to manufacture textile products this year.

As imports exceed exports, banks are offering premiums (or above the market rate) to exporters, and this is only going to strengthen the dollar to a lower level.

At the current rate, analysts believe the dollar could cross the high of Rs 240 in a few days.

Samiullah Tariq, head of research at the Pak-Kuwait Investment Company, said the market faced a liquidity crisis as the supply of dollars was less than its demand.

Import payments kept the rupee under pressure throughout the week, he said.

He added that indexation of the dollar against the local market also played a role in its appreciation.

“The rupee will continue to struggle until import payments ease and Pakistan receives dollar inflows.”

He said there are reports that funds are coming from the Asian Development Bank (ADB) and another multilateral institution, but not before next month.

“If any pledge from an external institution or a friendly country materializes in the next week, the rupee may take some losses, otherwise the free fall is likely to continue.”

He noted that there are chances that the dollar could depreciate next week if it crosses Rs 239.94, the highest since July 2022.

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