KARACHI:
The Pakistani rupee experienced a slight dip against the US dollar on Monday, declining by 0.05% in the inter-bank market. By the end of the day, the currency stood at Rs278.57, marking a loss of 15 paisa.
Last week, the rupee also saw a modest depreciation, falling by 30 paisa, or 0.11%, in the inter-bank market.
According to the State Bank of Pakistan (SBP), the local currency closed the week at Rs278.42, compared to Rs278.12 in the preceding week.
Pakistan Forex Association President Malik Bostan attributed the rupee movement to year-end factors, including the repatriation of $320 million in profits by foreign investors in November, with more expected in December.
Importers are also settling Letters of Credit (LCs), adding to dollar demand. Germany has raised concern about the delay in opening LCs for electric vehicle imports by Pakistan, while the State Bank continues to clear the maturing LCs.
Bostan expects pressure on the rupee to ease after December. Trade slows down after December 25 due to Christmas and remittances from Pakistani Christians abroad help stabilise the rupee.
Although Pakistan Tehreek-e-Insaf (PTI) founder Imran Khan has called on the Pakistani diaspora to halt remittance flows, Bostan said it was yet to be seen how the market would respond to his call as his earlier plea to halt remittances during protests had a little impact.
Separately, the Sui Southern Gas Company’s gas price hike for large-scale consumers may put a strain on the economy and the rupee.
The US dollar strengthened internationally as gold prices eased in thin, holiday-season trade. Investors sought further clues on the US Federal Reserve’s monetary policy stance next year after its latest meeting signalled easing would be gradual.
Spot gold was down 0.1% at $2,617.58 per ounce. US gold futures eased 0.5% to $2,631.80.
The dollar index was up 0.6% against its rivals and hovered around a two-year high. A stronger dollar reduces gold’s appeal for holders of other currencies.
However, gold prices remained unchanged in Pakistan on Monday. According to the All Pakistan Gems and Jewellers Sarafa Association (APGJSA), the price of gold per tola stayed at Rs273,400. On Saturday, gold prices had risen by Rs2,100/tola.
Interactive Commodities Director Adnan Agar noted that gold prices tend to remain stable during the US holiday season with limited fluctuations.