Pakistan's rupee posted its first recovery since September 21, registering a gain of 18 paisas to finish at 170.48 against the US dollar in the inter-bank market on Friday.
As per the State Bank of Pakistan (SBP), the PKR closed at 170.48 against the USD, an increase of 18 paisas or 0.11%. On Thursday, the rupee had closed at 170.66, the lowest level to date.
The PKR, which has seen its value depreciate by nearly 11% against the USD in less than five months, has been under immense pressure amid the widening current account deficit and record growth in imports, which crossed $6 billion in the month of August alone.
Policymakers and market participants are now eagerly awaiting trade figures for September to get a sense of direction.
Meanwhile, the SBP has undertaken a number of measures to curtail imports. On Thursday, it decided to impose a 100% cash margin requirement on import of 114 items, taking the total number to 525.
The SBP said that the measure will help discourage imports of these items and thus, support the balance-of-payments.
Earlier, the SBP revised its Prudential Regulations (PRs) for consumer financing to moderate import and demand growth. As per revised regulations, the maximum tenure of the auto finance facility was reduced from seven to five years. In addition, new as well as used imported vehicles will not be eligible for auto financing from banks/DFIs.
“Efforts are also being made to encourage exports, particularly non-conventional sectors,” said brokerage house Arif Habib Limited in its latest report. “In addition, the 25bps hike in policy rate should pave way for further tightening, although gradual, to control import demand and hence, trade deficit, while also keeping a check on inflation,” it said.
Inter-bank market rates for dollar on Friday
BID Rs 170.45
OFFER Rs 170.55
In the open market, the PKR gained 50 paisas for buying and 90 paisas for selling against the USD, closing at 172 and 172.60, respectively.
Against Euro, PKR gained 50 paisas for both buying and selling, closing at 199 and 200.50, respectively.
Against UAE Dirham, PKR gained 10 paisas for buying while remaining unchanged for selling, closing at 47.90 and 48.20, respectively.
Against Saudi Riyal, PKR gained 10 paisas for both buying and selling, closing at 45.70 and 45.90, respectively.
Open-market rates for dollar on Friday
BID Rs 172
OFFER Rs 172.60