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first decline in the rupee in four weeks

Tuesday saw a 0.07% depreciation in the value of the Pakistani Rupee, which had appreciated 11% during the previous 28 days of working days due to increased demand for the dollar. The rupee ended the day at Rs277.03 to the dollar in the interbank market.

According to the market discussion, the rupee has hit its “fair value” at Rs277/$, and a little drop was expected.

Whether the Currency will restart its upward trajectory in a day or two, stabilize at its current levels in the short to medium range, or begin to give back the gains made over the previous four weeks is a significant unknown.

According to the current scenario, exporters have reportedly sold their foreign currency future revenues on forward exchanges. Some of them have sold money they don’t actually own in the hopes that they will purchase it again at a higher price at a more convenient time in the future.

Market participants believed that the rupee would soon rebound to Rs250-260/$.

However, several importers held off on purchasing foreign currency while they waited for the rupee-dollar Exchange Rate to eventually stabilize. It indicates that demand for US dollars has increased and that the situation of high supply and low demand may persist, at least in the near future.

Earlier, the currency experienced its longest rebound in three years, recovering a total of 10.93%, or Rs30.27, over 28 straight working days. The rupee was also named the best-performing currency in the world in recent weeks.

On September 5, 2023, during the establishment of the caretaker administration, the exchange rate of the rupee reached a historic low of Rs307.10 to the dollar.

Following a government assault on currency smugglers and hoarders to shut down the underground market, the recovery got under way. The action assisted in boosting the market’s dollar flow and satisfying importers’ desire.

The cessation of the illicit currency trade also compelled exporters to liquidate their holdings as quickly as possible and encouraged Pakistanis living abroad to return money home via authorized methods.

According to the Exchange Companies Association of Pakistan (ECAP), the currency finished unchanged at Rs277/$ on a daily basis. Over the previous six weeks, the currency has recovered 18.41%, or Rs51, in the retail market.

According to JS Research, the real effective exchange rate (REER), which measures the value of Pakistani currency in relation to a basket of its trading partners’ currencies, increased to a one-year high of 103.

The post first decline in the rupee in four weeks appeared first on RangeInn.



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