Pakistan's rupee saw a marginal gain against the US dollar on Thursday, appreciating to close below the 175 level in the inter-bank market.
As per the State Bank of Pakistan (SBP), the PKR finished at 174.98 against the USD after a day-on-day appreciation of 6 paisas or 0.03%. On Wednesday, the rupee had closed at 175.04 against the dollar in the inter-bank market.
The rupee has been under pressure for months now with the staff-level agreement between Pakistani authorities and the International Monetary Fund (IMF) providing some sense of direction at the start of this week.
“The clarity achieved in the markets amid agreement with the IMF has helped stabilise PKR,” Saad Khan, Head of Research at IGI Securities, told Business Recorder.
The analyst said that the government is also expected to issue $1 billion in Sukuk bonds next week.
“This as well as the expected funding from Saudi Arabia, and $1 billion from the IMF in January, would help boost Pakistan's foreign exchange reserves by over $5 billion,” he said.
Pakistan’s current account deficit widened to $1.66 billion in October 2021 from a surplus of $448 million recorded in the same month last year. On a monthly basis, CAD widened 46% as compared to $1.13 billion recorded in the previous month (September 2021).
Talking about the central bank's latest measure to increase the policy rate by 150 basis points, Khan said that the rate hike would help attract foreign inflows for debt markets.
“But these inflows are not sustainable,” he added.
Inter-bank market rates for dollar on Thursday
BID Rs 174.95
OFFER Rs 175.05
In the open market, the PKR lost 25 paisas for buying and 50 paisas for selling against USD, closing at 177 and 178, respectively, adjusting back to the one rupee spread between buying and selling.
Against Euro, the PKR lost one rupee for both buying and selling, closing at 197.50 and 199, respectively.
Against UAE Dirham, the PKR lost 20 paisas for both buying and selling, closing at 49.70 and 50.20, respectively.
Against Saudi Riyal, the PKR lost 70 paisas for buying and 40 paisas for selling, closing at 47.10 and 47.40, respectively.
Open-market rates for dollar on Thursday
BID Rs 177
OFFER Rs 178