Rupee registers minor gain against US dollar

After successive declines, Pakistan’s rupee registered a minor gain against the US dollar, recording an appreciation of 0.03% in the inter-bank market on Tuesday.

As per the State Bank of Pakistan (SBP), the rupee closed at 177.41 after a day-on-day appreciation of 6 paisas or 0.03%. The local currency had been on a negative trajectory for the past three sessions, dropping a cumulative 0.74% since Thursday last week.

The marginal gain comes a day after Prime Minister Imran Khan, in a move to appease the masses amid high political noise, announced to reduce petroleum products’ prices by Rs10 per litre and electricity tariff by Rs5 per unit and other measures.

In a televised address to the nation on Monday, the PM had said the decision comes despite the regulator’s summary to increase oil prices.

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Following the development, Khan also announced an industrial package on Tuesday.

“The relief measures alongside an industrial package has created a positive sentiment in the market,” Samiullah Tariq, Head of Research at Pakistan Kuwait Investment Company, told Business Recorder.

On concerns over relief measures creating pressure on the fiscal front, Tariq said that “the government already has a funding plan as announced by Finance Minister Shaukat Tarin earlier, therefore it will not be much of an issue”.

However, Fahad Rauf, Head of Research at Ismail Iqbal Securities Limited, expressed concern over the International Monetary Fund’s (IMF) willingness to come on-board with the new measures announced by the government.

“On the assumption that the IMF does not give its approval, it is possible that the package announced could be reverted, like earlier,” added Rauf.

He said that giving subsidies is always a negative development for a deficit economy, “as with rising oil prices, the quantum of subsidy given would widen.

“If the impact of rising cost is not passed, it will lead to a revenue loss.”

Inter-bank market rates for dollar on Tuesday

BID Rs 177.30

OFFER Rs 177.40

Open-market movement

In the open market, the PKR remained unchanged for both buying and selling against USD, closing at 177.50 and 178.50, respectively.

Against Euro, the PKR lost 5 paisas for buying while remaining unchanged for selling, closing at 197.10 and 199, respectively.

Against UAE Dirham, the PKR gained 27 paisas for buying and 30 paisas for selling, closing at 48.10 and 48.55, respectively.

Against Saudi Riyal, the PKR lost 5 paisas for both buying and selling, closing at 46.85 and 47.30, respectively.

Open-market rates for dollar on Tuesday

BID Rs 177.50

OFFER Rs 178.50