- Falls another 0.03%, closes at 169.08 in inter-bank market on Friday
Pakistan’s rupee edged near its all-time low after a third successive fall against the US dollar on Friday, closing at 169.08 in the inter-bank market.
As per the State Bank of Pakistan (SBP), the PKR closed at 169.08 against the USD, a day-on-day decline of 5 paisas or 0.03%.
The rupee ended at 169.12 on September 15, 2021, its all-time lowest closing against the dollar, before a minor recovery began. However, the rupee has remained under pressure this week with concerns over import payments and rising current account deficit continuing to dent market sentiment, say analysts.
Measures including mandating banks to share a five-day schedule of upcoming import payments, revising it upwards from the earlier two-day directive, and directing them to seek permission for imports that are valued at $500,000 per transaction, cutting in half the original payment ceiling of $1 million, have yet to take effect.
As per SBP data, the current account deficit for August 2021 clocked in at $1.5 billion, nearly 88% growth in a single month, with the import figure hitting $6.6 billion.
In addition to the earlier directives, the SBP also issued a circular on Thursday, announced revisions in Prudential Regulations (PRs) for consumer financing to moderate import and demand growth.
According to the SBP, this targeted step will help moderate demand growth in the economy, leading to slower import growth and thus, supporting the balance-of-payments.
Experts believe more such measures are in the offing.
“These are proactive measures and will support PKR, but the only option for the government is to increase exports,” multiple market analysts told Business Recorder. They said that the benchmark export-to-GDP ratio is 15%, while in Pakistan it is only at 7%.
On the other hand, Pakistan’s import-to-GDP ratio hovers around 20%, which needs to be curtailed, added experts.
Inter-bank market rates for dollar on Friday
BID Rs. 169
OFFER Rs. 169.10
Meanwhile, in the open market, the PKR lost 70 paisas for buying and 1.20 rupees for selling against the USD over Thursday’s rates, closing at 170.20 and 171, respectively.
Against Euro, the PKR lost 50 paisas for both buying and selling, closing at 198 and 199.50, respectively, breaking the static streak of four days.
Against UAE Dirham, the PKR lost 15 paisas for buying and 25 paisas for selling over Thursday’s rates, closing at 46.80 and 47.10, respectively.
Against Saudi Riyal, the PKR lost 5 paisas for both buying and selling, closing at 45.25 and 45.45, respectively.
Open market rates for dollar on Friday
BID Rs. 170.20
OFFER Rs. 171