Karachi: Tresmark says June-end closing rates would be around 310 per dollar while depreciation looks unlikely
KARACHI, JAN 28: The rupee is poised to hold steady in the coming days against the dollar and is headed towards a stable close by the end of this fiscal year, media quoted analysts as saying on Sunday.
During the outgoing week, the local currency made minor gains against the greenback in the interbank foreign exchange market. It closed the week on 279.59.
Meanwhile, the analysts said that a stable currency is the key to curbing imported inflation and boosting business confidence and foreign investment.
“The component of imported inflation rises when the value of the rupee declines, said Tresmark, a financial terminal in a weekly note. “A policy of steady to stronger local currency has been adopted to prevent this.”
It should be clear by now that inflation is the nation’s biggest party spoiler. Not only does it not go away, but every other policy aims to normalise it instead. Most economies prioritise inflation over economic growth, which is a global issue.
In 2023, Pakistan saw its highest-ever inflation, and its currency fell to all-time lows until a $3 billion International Monetary Fund (IMF) bailout package saved the country from an imminent sovereign default in July.
The country’s consumer price index inflation increased to 29.7% in December from 29.2% in November.
“The rupee/dollar parity was 286 at the beginning of the fiscal year. A yearly depreciation of 7–10% is typical, based on historical trends, supporting exporters and keeping the real effective exchange rate close to par,” Tresmark said.
“This would imply that June-end closing rates would be around 310/$. As of today, the rupee is actually stronger by around 2%, and depreciation looks unlikely,” it added.