KARACHI: The rupee continued to depreciate against the US dollar last week, although the fall was less dramatic than before. The currency closed at a record low of 178.04 on Friday, a fall of 33 paisas week-on-week.
A widening trade deficit, mainly due to a high import bill that clocked in at over $33 billion during the five months of the ongoing fiscal year, is the primary reason behind the rupee decline.
Analysts believe a part of this trade deficit is inevitable since it is a consequence of rising global commodity prices.
During the week, the State Bank of Pakistan’s (SBP) Monetary Policy Committee also met to review economic indicators and increased the policy rate by 100 basis points to 9.75%. With other central banks around the world beginning to initiate tightening policies, some analysts are hopeful that this will bring global commodity prices down, relieving some pressure on the widening trade deficit.
During the week, the fall of Pakistan’s foreign exchange reserves by $89.9 million also pushed down the rupee.
Analysts also say the currency market will see stability once the International Monetary Fund’s board approves the programme, and Pakistan receives the billion-dollar inflow associated with it. Open-market movement
In the open market, the PKR lost 1.60 rupees for both buying and selling over the week, closing at 180.50 and 181.50, respectively.
Against Euro, PKR lost 1.20 rupees for buying and 80 paisas for selling over the week, closing at 201 and 202.50, respectively.
Against UAE Dirham, PKR recorded net loss of 50 paisas for buying and 60 paisas for selling, closing at 50.10 and 50.50, respectively.
Against Saudi Riyal, PKR overall lost 15 paisas for buying and 30 paisas for selling, closing at 47.40 and 47.85, respectively.
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Weekly Interbank market rates for dollar
Bid Close Rs 178.00
Offer Close Rs 178.10
Bid Open Rs 177.71
Offer Open Rs 177.81
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Weekly Open market rates for dollar
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Bid Close Rs 180.50
Offer Close Rs 181.50
Bid Open Rs 178.90
Offer Open Rs 179.90
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Copyright Business Recorder, 2021
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