- Closes at 169.03 in the inter-bank market, a day-on-day decline of 0.21%
Barely a week after crossing the 169-mark in the inter-bank market before posting a minor recovery, the rupee depreciated again on Thursday to close at 169.03.
As per the State Bank of Pakistan (SBP), the PKR closed at 169.03 against the dollar in the inter-bank market on Thursday, a day-on-day decline of 35 paisas or 0.21%.
The PKR plunged to an all-time low against the US dollar on September 15, 2021, closing at 169.12 in the inter-bank market.
The PKR has lost nearly 10% since its recent high in May 2021 on the back of a growing current account deficit.
“The rupee is under pressure owing to rising imports and the uncertainty in Afghanistan,” said Tahir Abbas, Head of Research at Arif Habib Limited, while talking to Business Recorder.
As per the latest data released by the central bank, the current account deficit for August 2021 clocked in at $1.5 billion against $0.8 billion reported in July 2021. Imports were largely responsible, increasing to nearly $6.6 billion, primarily on account of the higher petroleum bill (mostly price related), food category imports, and other imports under economic assistance/deferred payments.
SBP Governor Dr Reza Baqir, in his address at the 'Leaders In Islamabad Business Summit 2021', informed that dollars are being smuggled to neighbouring Afghanistan, putting further pressure on the rupee.
The central bank chief said that law enforcement agencies need to monitor the outflow.
Meanwhile, Abbas was hopeful that the import pressure will subside in the coming months owing to measures taken by the central bank, especially to curtail the import of luxury items.
He said he expected the rupee to appreciate, and hover between the 165-167 level against the USD in the short run in 2-3 months. "However, it all depends on the trade gap."
Earlier, Business Recorder reported that the SBP has mandated commercial banks to share a five-day schedule of upcoming import payments, revising it upwards from the earlier two-day directive, amid official attempts to arrest the rupee decline.
The SBP also directed banks to seek permission for imports that are valued at $500,000 per transaction, cutting in half the original payment ceiling of $1 million, which banks could make without needing central bank authorisation.
The two directives came during a meeting between commercial banks and the SBP late last week.
In the open market as well, the rupee came close to 170, eventually losing 20 paisas for both buying and selling over Wednesday’s rates, closing at 169.50 and 169.80, respectively.
Against the Euro, PKR remained unchanged for the fourth consecutive day for both buying and selling closing at 197.50 and 199, respectively.
Against the UAE Dirham, PKR lost 5 paisas for both buying and selling, closing at 46.65 and 46.85, respectively.
Against the Saudi Riyal, PKR lost 10 paisas for buying while remaining unchanged for selling, closing at 45.20 and 45.40, respectively.
Inter-bank market rates for dollar on Thursday
BID Rs. 168.95
OFFER Rs. 169.10
Open market rates for dollar on Thursday
BID Rs. 169.50
OFFER Rs. 169.80