The Pakistani rupee declined by Rs0.06, closing at Rs278.70 against the US dollar in the interbank market on Tuesday—a two-week low and its second consecutive day of decrease. State Bank of Pakistan (SBP) data shows that the rupee has depreciated by Rs0.16 over the past two days against the dollar.
In the open market, the rupee weakened by Rs0.25, reported by the Exchange Companies Association of Pakistan (ECAP), ending the day at Rs280 per dollar. This downturn may signal rising demand for foreign currency or a decrease in domestic supply, potentially due to delays in the International Monetary Fund’s (IMF) new $7 billion loan program for Pakistan.
Despite a recent reduction in the trade deficit and a modest increase in August’s export earnings, suggesting a dollar surplus, the rupee remains under pressure. The SBP reportedly buys dollars from local markets to prepare for upcoming foreign debt repayments and strengthen the country’s foreign exchange reserves. Currently, reserves are critically low at $9.40 billion, providing less than two months of import coverage.
Persistent concerns about debt, high-interest payments, and rising energy costs continue to strain the domestic economy and industrial output. Although Finance Minister Muhammad Aurangzeb expressed optimism for the next IMF loan tranche arriving this month, the currency market’s response has been tepid.
