Interbank closing: Pakistani rupee declines amid increasing demand for US dollar

WEB DESK: The Pakistani rupee (PKR) experienced a slight decline of 0.11 per cent against the US dollar in the inter-bank market, settling at 279.12, following a decrease of Re0.32, as reported by the State Bank of Pakistan (SBP).

This decline marked a departure from the previous week’s trend when the PKR had weakened by Rs1.18, or 0.42 per cent, closing at 278.80 against the US dollar.

Interbank closing #ExchangeRate for todayhttps://t.co/bEThWJNeZj#SBPExchangeRate pic.twitter.com/knhBFSTxV2

— SBP (@StateBank_Pak) October 23, 2023

According to experts from a brokerage house, the drop in the local currency’s value was attributed to increased demand for the US dollar to facilitate foreign payments.

This came after a notable period of positive performance, where the rupee had maintained gains for 28 consecutive sessions.

During this period, it had appreciated by 10.93 per cent, rebounding from a record low of 307.1 against the US dollar in the interbank market on September 5.

This remarkable strengthening of the PKR was primarily attributed to stringent measures taken against smuggling and increased regulations on exchange companies.

However, the positive momentum was disrupted on Monday, reflecting the dynamic nature of the foreign exchange market.

Read more: Gold prices in Pakistan surge by more than Rs1,000 amid global market uptick

Internationally, the Japanese yen drew attention in the Asian market, briefly weakening to the 150-per-dollar level.

This shift was influenced by conflicting investor sentiments: some anticipated a rise in dollar yields, while others expected intervention from Japanese authorities in the market.

Global oil prices

Additionally, oil prices experienced a decline of more than $1 on Monday.

This drop was driven by reduced concerns about supply disruptions as diplomatic efforts intensified to contain the conflict between Israel and the Palestinian Hamas group.

These global factors further contributed to the nuanced fluctuations observed in currency markets.