Pakistan's rupee remained stable against the US dollar, appreciating a marginal 0.01% in the inter-bank market on Tuesday.
As per the State Bank of Pakistan (SBP), the PKR closed at 177.88 against the USD after a day-on-day appreciation of one paisa or 0.01%. On Monday, PKR closed at a record low of 177.89 against the USD.
The rupee has depreciated 11.28% CYTD and 12.9% on FYTD basis against US dollar.
Meanwhile, the Monetary Policy Committee (MPC) of the central bank was expected to meet to review economic indicators and take a decision on the key policy rate. It decided to increase the policy rate by 100 basis points when it made the announcement.
In the previous monetary policy meeting held on November 19, 2021, the committee had decided to raise the policy rate by 150 basis points to 8.75% to address risks related to inflation and the balance of payments.
“The money market is expecting a policy rate hike to the tune of 100-125 basis points,” an analyst said, while talking to Business Recorder, ahead of the announcement.
The analyst was of the view that the PKR is undervalued owing to the REER value, which remains at 94-95, “therefore, it should be at 169-170.”
The expert also added that the latest remittance figures has added to the positivity in the exchange rate. "However, the inflation rate would continue to bite and is expected to hit 13% in January owing to price adjustments in electricity, gas and fuel rates."
Inflows of remittances witnessed a month-on-month decline of 6.5% in November 2021. The country received $2.352 billion of inflows during November 2021 against $2.517 billion in October 2021, a decline of $166 million. On a yearly basis, remittances increased by 0.6% in November 2021. Cumulatively in the five months of the ongoing fiscal year, remittances were up 10%.
Inter-bank market rates for dollar on Tuesday
BID Rs 177.80
OFFER Rs 178
In the open market, the PKR lost 20 paisas for buying and 50 paisas for selling against USD, closing at 180 and 181, respectively.
Against Euro, the PKR lost 70 paisas for buying and 30 paisas for selling, closing at 200.50 and 202, respectively.
Against UAE Dirham, the PKR lost 10 paisas for buying while remaining unchanged for selling, closing at 49.91 and 50.30, respectively.
Against Saudi Riyal, the PKR lost 10 paisas for both buying and selling, closing at 47.20 and 47.65, respectively.
Open market rates for dollar on Tuesday
BID Rs 180
OFFER Rs 181