Rupee closes 13th successive session on negative note

• Rupee closes at 227.14 against US dollar in interbank market.
• Analysts believe local currency will remain under pressure.
• By June 2023, analysts expect rupee value will reach at least 250.

Pakistan’s rupee ended the trading week with a marginal loss against the US dollar, depreciating for the 13th consecutive time in the interbank market on Friday.

The local unit closed at 227.14 against the greenback after a meagre decline of 0.01% in the interbank market compared to Thursday’s close of 227.12, data released by the State Bank of Pakistan (SBP) showed.

The currency traded in the range of 226-227 during the week as the movement of the local currency was caused by a demand for dollars from importers in the foreign exchange market.

Analysts believe that the enormous financing imbalance and declining reserves will keep the local currency under pressure.

During the week ended on December 30, 2022, the central bank's forex reserves fell $245 million to $5.57 billion, down from last week's reserves of $5.821 billion.

Additionally, the rupee is expected to stay under pressure in the coming days due to the International Monetary Fund's (IMF) demand for the maintenance of a market-based currency rate.

Financial pundits said that the recent stability in the official exchange rate is not sustainable. The longer the government continues to pursue its plan to support the currency artificially, the more distortion it may produce.

By June 2023, analysts expect the rupee value will reach at least 250. Political instability and a precarious external account position will keep pressure on the rupee and things may grow significantly worse if the IMF programme is delayed any longer.