Rupee strengthens against US dollar, settles at 283.20

The Pakistani rupee maintained its positive momentum against the US dollar for the second straight session, appreciating 0.25% in the inter-bank market on Wednesday.

As per the State Bank of Pakistan (SBP), the rupee settled at 283.20, a gain of Re0.72. Despite the improvement, the rupee has lost over 20% of its value against the greenback during this calendar year.

A day earlier, the rupee had registered a minor gain, settling at 283.92 against the dollar in the inter-bank market, an increase of Re0.11 or 0.04%.

The market, however, lies in wait for resumption of the International Monetary Fund (IMF) Extended Fund Facility (EFF), which has remained stalled since November last year.

Bloomberg economists Ankur Shukla and Abhishek Gupta wrote in a report that “Pakistan is careening toward a potential default as soon as June unless it secures aid from the IMF” and noted that the South Asian nation would require another programme to avoid default in the next fiscal year.

Globally, the US dollar was pinned near five-week lows on Wednesday ahead of the conclusion of the US Federal Reserve’s policy meeting, with investors awaiting clarity on the path the central bank is likely to take in the wake of global banking turmoil.

Investor attention is zeroed in on whether the Fed will stick to its hawkish path to fight sticky inflation or pause interest rate hikes given recent trouble among banks which have included bankruptcy and last-minute rescues.

The US dollar index, which measures the currency against six peers, was at 103.22, just above the five-week low of 102.99 touched overnight.

Oil prices, a key currency indicator, slipped in Asian trade on Wednesday, after two straight days of gains, as an industry report showed US crude inventories rose unexpectedly last week in a sign demand may be weakening.

Inter-bank market rates for dollar on Wednesday

BID Rs 283.20

OFFER Rs 285.50

Open-market movement

In the open market, the PKR lost 50 paisa for both buying and selling against USD, closing at 283 and 286, respectively.

Against Euro, the PKR lost 1 rupee for both buying and selling, closing at 302 and 305 respectively.

Against UAE Dirham, the PKR lost 10 paisa for both buying and selling, closing at 77.20 and 77.90, respectively.

Against Saudi Riyal, the PKR gained 30 paisa for both buying and selling, closing at 75.00 and 75.70, respectively.

Open-market rates for dollar on Wednesday

BID Rs 283

OFFER Rs 286