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Dollar Rally Weakens Indian Rupee While Pakistan’s Currency Holds Steady

The dollar's late‑June rally signals sustained foreign‑currency pressure for oil importers and tests fiscal gains in South Asia.

Overview

  • The Indian rupee fell to about 94.65 per dollar on Tuesday as a stronger US dollar and risk‑averse investor flows pushed USD/INR lower.
  • The Pakistani rupee showed marginal gains near 278.16–278.20 in late‑June inter‑bank and open‑market quotes, reflecting relative stability versus the dollar.
  • Renewed US–Iran military exchanges lifted oil prices and raised safe‑haven demand for the dollar, a factor that pressured regional currencies and trading sentiment.
  • Month‑end corporate and importer demand for dollars, together with shortened trading around Muharram that reduced liquidity, amplified the dollar's impact on exchange rates.
  • Positive fiscal signals in Pakistan, including slower central government debt growth and a Barclays upgrade of Pakistan dollar bonds, supported the PKR and are a key factor to watch for sustaining that stability.