Against USD: Pakistan's rupee remains largely stable

Pakistan's rupee remained largely stable, depreciating a marginal one paisa against the US dollar in the inter-bank market on Friday.

As per the State Bank of Pakistan (SBP), the PKR closed at 178.13 against the USD after a day-on-day depreciation of one paisa or 0.01%.

Cumulatively, the rupee has depreciated over 11% CYTD and 13% on a FYTD basis against the US dollar.

The rupee has remained volatile since May this year as a higher import bill contributes to pressure on the currency. The fall has also contributed to inflation, forcing the central bank to raise interest rates by a cumulative 275 basis points since September to take it to 9.75%.

On Friday, the SBP also invited quotes for Open Market Operations (OMO) injection, where it maintained the newly-introduced 63-day OMO. Its results indicate a rate of 9.82% for seven-, and 9.85% for the 63-day injection.

Against USD: Pakistan's rupee registers marginal gain amid IMF announcement

“The continuation of 63-day OMO further strengthens SBP's stance on a stable policy rate in January 2022 policy,” commented Fahad Rauf, Head of Research of Ismail Iqbal Securities.

Rauf added that the 3M/6M secondary market yields are already trading 60bps below last cut-off, and maintained that “there seems to be less room for further correction in 3M but 6M can witness some further drop, unless the view on rate hike is more than 50bps”.

Meanwhile, total liquid foreign exchange reserves held by the SBP decreased by $415 million to $18.153 billion during the week ended December 17, mainly due to external debt repayment.

Fiscal year 2021-22: $4.7bn foreign debt incurred in first 5 months

Additionally, Pakistan's foreign debt soared to $4.7 billion from multiple financing sources in the first five months (July-November) of 2021-22 including $1.53 billion from foreign commercial banks (33 percent) against the total budgeted external loans of $14.088 billion for the entire fiscal year.

Inter-bank market rates for dollar on Friday

BID Rs 178.05

OFFER Rs 178.15

Open-market movement

In the open market, the PKR gained 10 paisas for both buying and selling against USD, closing at 178.90 and 179.90, respectively.

Against Euro, the PKR gained 50 paisas for both buying and selling, closing at 200.50 and 202, respectively.

Against UAE Dirham, the PKR lost 10 paisas for both buying and selling, closing at 50.70 and 51.10, respectively.

Against Saudi Riyal, the PKR lost 10 paisas for both buying and selling as well, closing at 47.20 and 47.60, respectively.

Open-market rates for dollar on Friday

BID Rs 178.90

OFFER Rs 179.90