US dollar expected to drop below Rs280 next week

WEB DESK: The Pakistani rupee’s bullish trend against the US dollar persisted for the 22nd consecutive session, with the dollar losing 93 paisas and settling at Rs282.69, bringing the rupee closer to the significant Rs280 mark. Experts predict that the US dollar may drop below Rs280 in the coming week.

However, concerns loom over exchange rate stability due to depleting foreign exchange reserves, stagnant exports, and a lack of recent foreign investments.

Fears of significant outflows for debt servicing, which might favour the dollar, persist. Pakistan’s existing debt burden raises worries, and the country awaits the second tranche under the $3 billion standby arrangement with the IMF to address financial challenges.

Although efforts to privatise state-owned enterprises, like Pakistan International Airlines (PIA), are underway to enhance foreign exchange reserves, experts caution that a surge in imports could elevate the current account deficit (CAD).

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Despite a reduction in CAD to $2.4 billion in FY23 from $17.5 billion in FY22, projections for the current fiscal year hover around $6 billion, raising concerns.