ISLAMABAD: The Pakistani rupee opened stable in Tuesday’s trading session against the US dollar in the inter-bank market but weakened as the day progressed, hitting its lowest level in 19 months.
At 10:00 AM, the rupee remained unchanged from Monday’s closing rate of Rs284.22. However, by midday, the dollar appreciated by 18 paisas, pushing the exchange rate to Rs284.40, according to currency dealers.
In the open market, the dollar also gained 20 paisas, climbing to Rs286.85, marking the rupee’s weakest level since late 2023.
Currency analysts attributed the rupee’s steady decline to sustained demand for the US dollar, mainly driven by import payments and the State Bank of Pakistan’s (SBP) ongoing dollar purchases to bolster foreign exchange reserves.
“The central bank’s interventions, along with external payment obligations, are putting continued pressure on the rupee,” said a senior currency dealer. “Unless there’s a strong inflow of foreign exchange through remittances or official financial support, this downward trend is likely to persist.”
Global Market Uncertainty Adds Pressure
The rupee’s decline is also being influenced by global financial instability following former US President Donald Trump’s announcement of 25% tariffs on a wide range of goods from Japan and South Korea, effective August 1.
The news rattled international currency markets. The Japanese yen dropped to a two-week low of 146.44 against the dollar, while the South Korean won also declined by around 1%. Meanwhile, the US dollar index remained firm, trading at 97.40 against a basket of major currencies.
Investor sentiment remains cautious after Trump indicated some flexibility on the tariff deadline, suggesting he may consider alternate proposals from trade partners. However, the uncertainty surrounding potential escalation in global trade tensions continues to unsettle financial markets worldwide.
