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The Pakistani rupee depreciated by 21 paisa against the US dollar, closing at PKR 279.57 in the interbank market on Tuesday (February 20), driven by increased demand for foreign currency, particularly for imports and corporate payments reflecting demand pressure for foreign payments.

A recent uptick in foreign exchange reserves to $13.149 billion, indicating positive economic trajectory, ongoing political turmoil poses concerns for currency stability. Policymakers and financial institutions must prioritise measures to enhance economic resilience and attract foreign investment, ensuring stability in currency markets amidst global uncertainties.

According to the Forex Association of Pakistan (FAP), the buying and selling rates of the dollar in the open market stood at Rs279.7 and Rs282.25, respectively.

The price of the euro decreased by 03 paisa to close at Rs301.24 against the last day’s closing of Rs301.27, according to the State Bank of Pakistan (SBP).

The Japanese yen lost 01 paisa to close at Rs1.85, whereas a decrease of 76 pasia was witnessed in the exchange rate of the British pound, which was traded at Rs351.94 compared to the last closing of Rs352.70.

The exchange rates of the Emirates dirham and the Saudi riyal increased by 05 paisa and 06 paisa to close at Rs76.11 and Rs74.54 respectively.

Currency experts attribute the depreciation of the rupee to an increase in the demand for foreign currency, particularly for import and corporate payments. While the rupee had remained relatively stable against the greenback for the past few weeks, analysts had been cautioning about the potential impact of ongoing political turmoil on the country’s repayment capacity, which could lead to currency fluctuations.

The State Bank of Pakistan (SBP) recently disclosed that the country’s foreign exchange reserves experienced a notable uptick, rising by $51 million in the week ending February 9, 2024. This positive development saw Pakistan’s total foreign exchange reserves reach $13.149 billion, marking an increase from the $13.098 billion recorded just a week earlier on February 2, 2024.