Rupee ends lower against dollar in interbank market

KARACHI: The Pakistani rupee closed slightly weaker against the US dollar in the interbank market on Monday.The rupee finished at 278.62 per dollar, compared with the previous closing value of 278.56.

According to dealers, the local currency barely lost ground because businesses and importers typically have stronger dollar demand at the beginning of the week. However, the rupee slightly appreciated in the open market, reaching 280 versus the dollar from 279.86 in the previous session. As long as the dollar’s supply and demand are balanced, dealers anticipate that the rupee will stay steady in the coming sessions.

Based on various factors such as inflation, the real effective exchange rate (REER), and the current account deficit, along with surveys conducted among bank dealers, a report from Tresmark forecasts the rupee will maintain the 278 to 282 range until April 2025. It projects a movement from 282 to 285 until June and then to 285 to 290 by December.

However, potential risks to this outlook include disengagement from the International Monetary Fund (IMF), a significant rebound in oil prices, and escalating geopolitical or domestic political issues. Strong actions against the grey and black markets to discourage speculation, restricting growth and imports to control foreign exchange outflows, and making decisive moves to secure a new IMF loan programme improved the rupee’s status, transforming it from the worst-performing currency in 2023 -- with depreciation of 24 per cent -- to a more stable currency in 2024, with an appreciation of 1.0 per cent.