Is The Rupee Likely To Weaken Against Dollar?

ISLAMABAD: Despite a stable monetary policy, the Rupee weakened due to few key factors like historically, volatility has been observed during IMF reviews.

Secondly, foreign exchange reserves remain under pressure, though they are stable around $16 billion. Lastly, regional currencies are weakening, with the Indian Rupee briefly touching 87/$.

Remittance inflows have surged due to Ramadan and are expected to continue until Eid, improving dollar liquidity and boosting forward premiums. Import pressure has also eased, thanks to lower oil prices and reduced cotton imports.The dollar breaks the previous record and hits Rs240

Analysts expect the IMF Staff-Level Agreement (SLA) to be finalized by the end of March, unlocking a $1 billion tranche, climate resilience financing, and other multilateral funding. A lower country risk rating and improved external financing access are also anticipated.

A controlled depreciation of 5-10 paisa per week seems likely, but no major pressure is expected. Exporters are hesitant to sell forward, fearing the IMF may demand depreciation.

However, this seems unlikely, as the IMF did not insist on it when the program started.
March inflation estimates have been revised down to 1-1.5%.

Having such low inflation during Ramadan indicates weak demand, increasing pressure on the central bank to cut interest rates to stimulate growth.

Multiple indicators suggest that the U.S. may be heading for a recession, including falling Treasury yields, declining oil prices, a bearish stock market, plummeting business confidence, and Trump’s trade tariffs backfiring.

Gold is nearing the $3,000 mark, driven by trade uncertainties, geopolitical tensions, and expectations of further Fed easing.

Trump’s controversial statement about annexing Greenland added to market uncertainty, increasing demand for safe-haven assets.

OPEC+ increasing supply amid a bearish oil market seems politically motivated, possibly under U.S. pressure. Brent has dropped from $82 to $69 as hedge funds and traders take short positions, signaling further declines.

-USD/PKR: 1 Week – 281.50, 1 Month – 281.50, 1 Quarter – 282.50
– Gold: 1 Week – $3006 (Bullish), 1 Month – $2889 (Bearish), 1 Quarter – $2902 (Neutral)
– Oil WTI: 1 Week – $66.50 (Bearish), 1 Month – $69.08 (Bullish), 1 Quarter – $69.17 (Bullish)