Dollar continues upward march, closes above Rs208 – Business

The US dollar continued its gains as it closed above 208 rupees in the interbank market on Friday. Trend analysts attribute the delay to transactions with the International Monetary Fund (IMF) and the rapid depletion of foreign exchange reserves.

The US dollar rose 95 pie to Rs208.70 from yesterday’s close of Rs207.75, according to the Pakistan Foreign Exchange Association (FAP). It was rated at Rs1.45 on Thursday.

The rupee has continued to decline since the start of the week, which has been making investors uneasy and causing frustration among stakeholders in the economy.

Malik Bostan, president of the Forex Trade Association, described three main causes of rupee pressure:

He said money sent by Pakistanis abroad has fallen by $50 million over the past few months.

He also said that the increase in demand for foreign currency could be due to vacations among Pakistanis. “Government must stop people from going abroad for vacation, as that will increase the demand for foreign currency in the market.”

Bostan also said soaring international oil prices pose a risk to the rupee and have proposed measures to reduce fuel consumption. He added that this could be achieved by imposing fuel quotas on gas-hungry vehicles.

FATF Results

Meanwhile, Saad Bin Naseer, Director of Mettis Global, said: The rupee is under pressure today in anticipation of the ongoing plenary session of the Financial Action Task Force (FATF), the global task force to combat money laundering and terrorist financing, the rupee said today.

The International Oversight Organization will hold a press conference today to announce the country’s progress to date in correcting deficiencies in its counter-terrorism financing and anti-money laundering regime.

Naseer stressed that oil-related payments are putting additional pressure on the rupee today.

US Interest Rates Affecting Currencies

Meanwhile, Metis Global, citing Ahsan Mehanti of Arif Habib Group, said, “The dollar is in high demand for almost all major currencies as the Fed has decided to raise its key interest rate by 75 basis points.

“As a result, the rupee also strengthened against the dollar,” he said. On Wednesday, the Fed announced its most aggressive rate hike in nearly three decades, raising its benchmark interest rate by 0.75 percentage points to combat soaring inflation.

Moreover, Mehanti points out that Pakistan’s export market is very limited.

“Exporters remain in the sweet spot due to the depreciation of the rupee,” the analyst added.

Negative emotions cloud investor behavior

Separately, Tresmark’s head of research, Komal Mansoor, blamed the lack of dollar liquidity and increased year-end payout remittances to squeeze the rupee. “Exporters are selling a lot of dollars, and as a result, forward swaps are plummeting and all short trades are trading at a discount.”

She said the purchase of dollars by Haj was another reason for the rupee’s decline.

Despite some good news, such as the placement of Chinese deposits, Mansoor added, negative sentiment has completely clouded investor behavior.