KARACHI: The depreciation of the US dollar against the rupee has reached a point where its multidimensional negative impacts could hit the economy, industry sources warned.

After slipping below Rs280 on Monday, the greenback was trading at Rs279.91 on Tuesday, while currency experts believe it may decline further against the rupee, albeit at a slower pace.

There is no disagreement in the financial market that the exchange rate is being managed, yet it has succeeded in bringing stability to the economy on the external front. “If the dollar further depreciates, exporters would not sell their entire proceeds, as options remain open to sell at a better price,” said a currency expert.

So far, exporters are under strict vigilance by the State Bank, and it appears difficult to sell export proceeds outside the banking market; however, currency dealers said there is always room on the other side of the market.

“Further depreciation of the dollar against the rupee could have a negative impact on remittances, as witnessed in the past when the dollar found a path into the black market,” said Tresmark CEO Faisal Mamsa, adding that the State Bank should look into the issue seriously before it starts hurting the economy.

“The turning point came when sentiment deteriorated. As confidence weakened, flows slowed, and expectations changed abruptly. The rupee’s behaviour at that stage became sentiment-driven rather than valuation-driven. At that point, policy responses mattered enormously,” said Mamsa.

Other currency dealers said remittance senders could sell their dollars before they land in the country, which may alter sentiment. So far this year, remittances have increased by 10.6 per cent in the first six months of FY26.

Exchange companies sold about $1.4bn to banks during July-December FY26, compared with around $2bn in the corresponding period of FY25.

Currency experts said keeping the dollar around Rs280 appears preferable, as further depreciation could attract activity to the crypto market. Unofficial data show that the crypto market has already attracted $800m this year.

Exporters have also started investing abroad, as the country’s largest garment exporter, Interloop, has established a unit in Egypt. Experts said heavy taxes on industries and a lack of incentives could prompt more exporters to go abroad.

Published in Dawn, January 21st, 2026