In Karachi, the dollar gained strength in the foreign exchange markets on Monday due to various factors. The global increase in the value of the dollar against the yen, euro, and pound, along with the pressure from rising imports and the resurgence of a current account surplus after a four-month period in July, contributed to this rise.
As a result of the dollar’s advance, its interbank rates surpassed 297 rupees, while the open market rate closed at 304 rupees. Right from the beginning of the business day, the dollar showed a consistent upward trend in the interbank market. Consequently, the interbank rate of the dollar closed at Rs 297.13, marking an increase of Rs 1.36.
Similarly, in the open currency market, the dollar’s price concluded at 304 rupees, reflecting a rise of 2 rupees. The prevailing uncertain economic conditions and concerns about significant devaluation during the caretaker period are driving the demand for the dollar.
It’s worth noting that although the domestic foreign exchange reserves are sufficient for just 2 months of imports compared to the previous 3 months, the involvement in the IMF loan program and effective regulatory strategies are leading to an increase in official reserves. This improvement in supply indicates progress. However, after a four-month gap, the July current account deficit of $80.9 million also highlights a surge in imports, which increased from $3.17 billion in June to $4.22 billion in July.
Experts point out that the Real Effective Exchange Index has risen from 87.72 points in June to 91.58 points, suggesting room for improvement in the value of the Pakistani rupee against the dollar. Nevertheless, global devaluation pressures against the Japanese yen, euro, and pound are impacting the value of the Pakistani rupee negatively.