Friday witnessed a notable trend of dollar depreciation in the country’s foreign exchange markets while gold prices surged.
Depreciation of the Dollar in the Forex Market
According to the State Bank of Pakistan (SBP), the US dollar closed at Rs278.34 in the interbank market after losing 4 paisas on Friday. The forex report showed that the greenback fell by 11 paisas to Rs280.07 in the open currency market. Various economic factors and market sentiments determining exchange rates have influenced this dollar value drop.
Movement Against Euro and GBP
Local media reports citing Forex dealers said Europe’s single currency depreciated slightly, decreasing by eight paisas to end at Rs296.17. Similarly, the British pound declined by 28 paisas and was traded for Rs349.98 only. These are part of broader trends that affect different forex markets across countries, including ours!
Reasons behind Dollar Depreciation
There can be many reasons for such depreciation, like worldwide economic changes or variations in foreign investments. Still, all these are based only on a confidence shift within the markets. Whether people believe that their money will grow more if they convert from one currency into another, this belief affects demand-supply dynamics, leading to observed patterns.
Gold Prices Rise
Gold prices rose when one Tola (11.66 gm) of gold was sold for Rs700 higher than the previous day’s trade price on Friday. Demand for haven assets such as Gold increases during periods when there is uncertainty about economies, therefore causing its price to go up continuously even during times when other commodities may fluctuate heavily due to their perceived stability attached to them, which acts as an insurance policy against any unforeseen event occurring either domestically or globally.
