The Pakistani rupee depreciated further against the US dollar on Monday, losing 0.09% in the inter-bank market. The local unit closed at 284.72, marking a Re0.26 drop compared to the previous session.
This downward trend follows last week’s depreciation of Re0.49 or 0.17%, when the rupee closed at 284.46, down from 283.97, according to data from the State Bank of Pakistan (SBP).
Global Context:
The currency pressure is reflective of broader global trade tensions, particularly after U.S. President Donald Trump threatened to impose a 30% tariff on imports from the European Union and Mexico beginning August 1. The announcement, made via letters posted on Trump’s Truth Social platform, triggered caution across foreign exchange markets.
While the euro briefly dipped to a three-week low, it later regained ground and was last seen trading 0.12% lower at $1.1679. The Mexican peso also weakened, with the USD/MXN pair rising 0.25% to 18.6699.
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Other major currencies remained relatively stable:
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British pound: Down 0.07% at $1.3481
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Japanese yen: Gained 0.1% to 147.28 per dollar
Investors, however, appear increasingly desensitized to Trump’s tariff threats, with US stock markets scaling record highs and the US dollar showing only mild gains across currency pairs.
Oil Prices and Currency Parity:
Rising global oil prices — a key factor influencing emerging market currencies like the rupee — added pressure. As of early Monday:
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Brent crude rose $0.15 to $70.51/barrel, adding to Friday’s 2.51% gain
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WTI crude climbed $0.14 to $68.59/barrel, after gaining 2.82% in the previous session
The combination of elevated oil import bills and trade-related uncertainty continues to challenge Pakistan’s currency stability, especially as 85% of the country’s petroleum needs are met through imports.
Outlook:
With tariff threats escalating and crude prices on the rise, the rupee may face continued pressure unless bolstered by:
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Stable remittance inflows
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Improved current account position
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Foreign investment inflows or policy clarity from fiscal authorities
Market analysts recommend monitoring key macroeconomic indicators, including foreign exchange reserves, trade balance, and fiscal reforms, in the weeks ahead.
